Tariffs have been around for centuries. Commonly used to protect emerging industries or bolster national security, tariffs have evolved beyond trade tools into economic levers that can shift markets overnight. Tariffs have re-entered the conversation for mid-sized business leaders, especially those with global supply chains or international customer bases. But here's the thing: reacting like it’s still 1995 won’t cut it.
When faced with rising costs due to tariffs, many businesses reach for the same lever: raise prices. Simple enough, right? But that lever is often pulled too hard, too fast, and with too little nuance.
Here’s the reality: a 10% tariff on your imported goods doesn’t automatically translate to a 10% increase in your prices. Yet that’s exactly the mistake many companies make, assuming a pass-through is the easiest way to maintain margin.
What it does instead is create pricing shock—for channel partners, for end customers, and even internally among your own salespeople. And when pricing shock sets in, trust and traction can disappear overnight.
Let’s break it down. A tariff increases your cost of goods. Yes, that might affect your gross margin. But how much of that increase really needs to hit your customer? Not all of it. And certainly not all at once. Between variable margins, negotiated contracts, and customer expectations, you likely have more room to maneuver than you think. Also, think in terms of dollar effect, not percentages. Passing through a dollar increase is a lot easier to stomach than a percentage multiplier down the supply chain.
More importantly, your customers are feeling it too. They may be buyers who are absorbing costs on other inputs. They might already be skittish about future increases. Price sensitivity is high in volatile markets, and they’re watching closely to see which partners are transparent, fair, and stable.
Raising prices without explanation is a recipe for churn. Your messaging matters now more than ever. A strong go-to-market response includes:
When done well, this isn’t just damage control. It’s brand building.
Your sales team is the tip of the spear. If they don’t understand the rationale, they won’t defend the increase. Worse, they may discount reactively, undercutting your pricing discipline altogether. Make sure your finance, sales, marketing, and product teams are aligned—and that your messaging, pricing guidance, and competitive intelligence are reflected in your delegation of authority and updated as needed
Manufacturers who sell through channels need a stronger playbook than just "mark it up."
In part 3 of our series on tariffs, we flip the script and explore what buyers of tariffed goods can do to stabilize supply, rethink sourcing, and protect margins.
In the meantime, schedule your free 30-minute consultation now.
Catch up on the full series: