Navigating the impending tariff storm

By Apratim Sarkar, Michelle Drew Rodriguez, Shantanu Verma and Peng Bi

With new tariffs, a focus on reducing import dependency, and policies favoring domestic production, businesses face a complex environment that demands strategic foresight and adaptability.

The Tariff Challenge

Under the new administration, the U.S. has signaled its intent to introduce substantial tariff increases on goods from key trading partners. These measures aim to address trade deficits and promote domestic production. However, the potential impacts are significant, with increased costs across industries, strained supply chains, and heightened pressure on small and medium enterprises.

For businesses reliant on imports, these changes could increase costs by up to 60% for certain goods. Industries such as machinery, consumer products, chemicals, and transportation are particularly at risk. Companies must prepare for these shifts and adapt quickly to protect their bottom lines.

Proactive Strategies for Success

To mitigate the effects of these tariffs, Roland Berger highlights six critical strategies:

1. HS/HTS Code Optimization: Accurate product classification can help secure tariff reductions under trade agreements, ensuring compliance and cost efficiency.
2. First Cost Optimization: Implementing robust cost management processes ensures tariffs are only applied to required costs, minimizing unnecessary expenses.
3. Pricing Passthrough: Carefully evaluating market responses to price adjustments helps maintain profitability while balancing consumer behavior and competition.
4. Alternate Supplier Identification: Diversifying supplier bases mitigates geopolitical risks, enhances flexibility, and reduces reliance on vulnerable regions.
5. Product Design Optimization: Adjusting product specifications can lower costs without compromising consumer value, offering a strategic edge.
6. Strategic Capital Investment: Exploring nearshoring and reshoring options aligns with national policies favoring domestic production and reduces exposure to volatile trade regions.

Access In-Depth Insights

This article offers a snapshot of Roland Berger's comprehensive strategies for addressing the challenges of shifting trade policies. Roland Berger has prepared an in-depth report that delves deeper into each mitigation approach for businesses seeking more detailed guidance and tools to implement these strategies. The report includes scenario analyses, actionable frameworks, and case studies tailored to help organizations navigate this complex environment.

The detailed material is available if you'd like it. Please download our insights on how these strategies can be tailored to your business needs.

Why Partner with Roland Berger?

Roland Berger offers a comprehensive approach to tariff mitigation, including exposure assessments, strategy alignment, and implementation. This proven methodology delivers measurable ROI and ensures businesses are prepared for both immediate and long-term challenges. With extensive expertise in supply chain optimization, cost management, and strategic investments, the firm provides tailored solutions to help clients thrive in a shifting trade environment.

Additionally, Roland Berger’s subsidiary, PolarixPartner, enhances these efforts by offering deep cost analysis and engineering capabilities. Together, they deliver end-to-end support, ensuring businesses remain resilient and competitive.

Prepare for What’s Next

As businesses face increasing uncertainty in the global trade environment, partnering with experienced advisors is critical. Contact Roland Berger to access the full report and speak with one of our experts about the best strategies for your organization.

Register now to access the full publication “How to navigate the incoming tariffs storm“ and dive into the impact of U.S. protectionism on global trade and the need for business adaptability. Furthermore, you get regular news and updates directly in your inbox.