The U.S. government has announced sweeping new tariffs on imported goods from countries like China, Japan, and members of the European Union. With duties as high as 34% on some products, small businesses across the country are bracing for higher costs, potential delays, and tighter margins.
These tariffs are part of a broader strategy aimed at protecting domestic manufacturing, but for small businesses that rely on imported parts, products, or raw materials, the immediate effects can be disruptive. The good news? There are practical steps you can take to minimize the impact.
1. Diversify Your Supply Chain
Start evaluating your current suppliers and consider sourcing from countries not affected by the tariffs. Even better, explore domestic manufacturers who might now be more price-competitive. While changing suppliers takes time, it’s a solid long-term strategy to reduce risk.
2. Renegotiate With Suppliers
You don’t always have to switch suppliers—sometimes, simply asking can lead to better pricing, extended payment terms, or shared shipping costs. Strong relationships are key during uncertain times.
3. Understand Product Classifications
Tariff rates can vary significantly depending on how a product is classified. Work with a customs broker or trade compliance expert to see if your goods qualify for exemptions or can be reclassified under a lower-duty code.
4. Rethink Packaging and Components
Making small changes to your product can make a big difference. For example, shipping items without batteries or simplifying packaging might help avoid certain tariffs or reduce overall shipping costs.
5. Use the De Minimis Loophole
If you’re in e-commerce, consider splitting larger shipments into smaller parcels valued under $800. This allows them to qualify for duty-free treatment under the de minimis rule, as long as your logistics can support it.
6. Adjust Your Pricing (Carefully)
Passing higher costs on to customers isn’t ideal, but sometimes necessary. Be transparent—many consumers are aware of the broader tariff situation and may be more understanding if you communicate clearly.
7. Stay Ahead of Policy Changes
Tariff rules can shift quickly. Make it a habit to follow trade news or join an industry association that can keep you updated. A proactive approach gives you more time to react before changes hit your bottom line.
Final Thoughts
Tariffs are out of your control—but how you respond isn’t. Whether it’s diversifying your suppliers or optimizing your shipping strategy, small businesses that stay flexible and informed will weather this storm better than those that stand still.