Recent tariff policy changes have created significant uncertainty for businesses across industries. While headlines focus on international politics and global trade tensions, business owners need practical guidance on protecting their operations today. At Rea, we understand your concerns go beyond policy details to the immediate questions of how these changes affect your bottom line, customer relationships, and strategic planning.
This uncertainty comes at a challenging time when many businesses are already navigating supply chain disruptions, labor shortages, and inflation pressures. Rather than attempting to predict political outcomes, we believe the smarter approach is focusing on business fundamentals that remain within your control
Focus on What You Can Control
Rather than getting caught up in the complexity of international trade policy, successful businesses are focusing on four key areas:
1. Pricing Strategy
Take a fresh look at your pricing structure. Do you have the flexibility to pass along increased costs? Are you in a position of strength within your market, or will price increases put you at a competitive disadvantage? Being proactive about pricing decisions now can prevent painful adjustments later.
Implementation steps:
- Conduct a product-by-product margin analysis to identify which items are most vulnerable to tariff impacts
- Segment your customer base to determine where price adjustments may be more readily accepted
- Consider “unbundling” services or creating tiered pricing options that provide customers choices while protecting your margins
- Explore whether accelerating planned price increases ahead of tariff implementation makes strategic sense
Being proactive about pricing decisions now can prevent painful adjustments later and give customers time to adjust their expectations.
2. Contract Review
Examine your existing agreements with both suppliers and customers. Look specifically for:
- Escalation clauses that allow price adjustments
- Terms that address material cost fluctuations
- Force majeure provisions that might apply to significant policy changes
- Notice requirements for implementing price changes
- Duration and renewal terms that might lock you into unfavorable conditions
For manufacturing businesses, investigate whether your supplier agreements specify country of origin requirements and what flexibility exists to source from alternative locations. Construction companies should pay particular attention to material substitution clauses and how change orders are handled for regulatory changes.
For future contracts, build in protections that acknowledge the current volatile environment, including shorter contract durations and more frequent review periods.
3. Supply Chain Assessment
Some businesses have already begun pre-purchasing certain materials to lock in current prices. While that opportunity may have passed for some items, it’s still worth evaluating your supply chain for:
- Critical components affected by tariffs
- Alternative sourcing options, including domestic suppliers
- Inventory management strategies that provide buffers against disruption
- Product redesign opportunities that reduce dependence on heavily tariffed components
For construction companies specifically, evaluating the timing of material purchases against project schedules may reveal opportunities to mitigate risk. Manufacturing businesses might benefit from exploring component substitutions or investigating whether suppliers can shift production to facilities in countries not affected by the new tariffs.
4. Cash Flow Planning
Tariffs can create immediate cash demands well before you can recover costs through sales. Developing a clear picture of potential cash flow impacts will help you make informed decisions about:
- Financing needs and line of credit adjustments
- Payment terms with both suppliers and customers
- Capital expenditure timing
- Inventory levels and carrying costs
- Accounts receivable management and collection priorities
A rolling 12-month cash flow forecast that includes various tariff scenarios can provide valuable visibility into potential pressure points and help you prepare contingency plans.
Build Your Advisory Team
Complex challenges rarely have simple solutions. We recommend bringing together multiple perspectives:
- Your Rea advisor can help assess financial implications and tax consequences
- Legal counsel can review contract provisions and suggest protective language
- Industry associations often track sector-specific impacts and provide benchmarking data
- Supply chain consultants may identify alternative sourcing strategies
- Banking partners should be informed of potential changes to your capital needs
While Rea does not specialize in international trade policy, we’re committed to being a valuable sounding board as you navigate these changes. We can also connect you with specialized resources through our alliance network when needed.
Stay Flexible & Connected
Perhaps the most important strategy is maintaining adaptability. The current tariff landscape will likely continue evolving, and businesses that build flexibility into their operations will be best positioned to weather whatever comes next. By focusing on these fundamental business practices, you’ll not only navigate the current uncertainty but build resilience for future challenges as well.
Contact your Rea advisor today to discuss how these changes might affect your specific situation and to develop a customized strategy for your business. We’re committed to helping you not just respond to today’s challenges, but position your business for long-term success regardless of policy shifts.
