Tariffs present a universal challenge but also an opportunity. In our increasingly global economy, they can shape supply chains, direct pricing strategies, fundamentally alter market dynamics, and affect each sector uniquely, demanding tailored strategies for risk mitigation and opportunity maximization.
Understanding this two-part challenge is crucial: first recognizing the direct impacts of tariffs on cost structures, supply chains, and consumer behavior; and then crafting responsive strategies that align with those insights. Some businesses might deflect costs to end-users, while others may innovate with supply chains or pricing strategies to absorb impacts. For a few, tariffs might even offer a chance to seize market leadership and refine margins.
Our playbook offers tactical strategies for mitigating tariff-related disruptions. It dissects how various industries can respond to tariffs and demonstrates actionable insights into pricing, supply chain adaptations, and competitive positioning. We will explore the following sectors:
Tariffs will challenge a company’s agility, strategic foresight, and execution capabilities. By leveraging the insights in this playbook, businesses can move beyond reactive measures and adopt proactive, data-driven strategies to strengthen their competitive edge in a tariff-impacted world.
Tariffs can shape international trade, influence national economies, and change industry dynamics. While they are often intended as mechanisms for protecting domestic industries, tariffs can have far-reaching consequences for businesses across the supply chain. To navigate these complexities, companies must first understand the nature of tariffs and their broader market impact.
Tariffs are taxes imposed on imported goods, typically calculated as a percentage of the item’s value or as a fixed fee per unit. Governments implement tariffs for various reasons, such as protecting domestic industries, generating revenue, harnessing political leverage in trade negotiations, or correcting trade imbalances. Regardless of the reason, companies and consumers must manage the ultimate outcomes.
When tariffs are introduced or adjusted they create a ripple effect, impacting businesses at multiple levels. The effects can be immediate or gradual, depending on industry structure and supply chain resilience. Key areas of impact include:
Examining past tariff implementations provides valuable insights into how businesses have successfully — or unsuccessfully — navigated these challenges. A few key examples include:
Understanding tariffs is the first step in building a resilient business strategy. The next chapters will explore how different industries can develop tailored responses to protect margins, optimize supply chains, and turn challenges into opportunities.
Distributors operate at the intersection of manufacturers and customers, making them particularly vulnerable to tariff fluctuations. Their ability to execute price changes while maintaining customer relationships is critical in navigating tariff challenges. Unlike manufacturers, who may have more control over production costs and supplier decisions, distributors often have limited influence over the tariffs applied to the products they handle. This position makes pricing execution, communication, and customer adaptation essential components of their strategy.
When tariffs increase costs, distributors must decide whether to pass these costs directly to customers, absorb them, or implement a phased approach to minimize disruption. Passing costs on can strain customer relationships, but failing to do so can erode margins. Many distributors adopt a blended approach, using rebates, tiered pricing, or strategic promotions to ease the transition.
One of the biggest challenges for distributors is determining how to handle tariff-driven cost increases. Some companies opt to pass additional costs directly to customers through price adjustments, while others absorb the increases to maintain market share. The best approach depends on competitive dynamics, customer sensitivity to price changes, and long-term strategic goals.
Distributors can also help customers shift their sourcing strategies. If certain regions become cost-prohibitive due to tariffs, distributors can help customers explore alternative suppliers, such as shifting purchases from Canada to the U.S. or other lower-tariff markets.
There are several ways you can help support your customers:
Rebates can be a valuable tool for softening the immediate effects of tariff-driven price increases. Offering tiered rebates based on volume commitments or long-term contracts helps maintain customer loyalty while ensuring steady revenue streams.
Effective pricing execution is about more than just adjusting prices — it’s about transparent and proactive communication. Customers need to understand why prices are changing and what alternatives are available. Distributors that provide clear and timely explanations can strengthen customer trust and loyalty, even in a turbulent pricing environment. Customers are more likely to accept increases when they understand the reasoning behind them.
Best practices for communicating pricing adjustments:
By adopting a strategic approach to pricing execution, customer support, and communication, distributors can navigate tariff-related disruptions while maintaining strong customer relationships and market positioning.
For manufacturers, tariffs can present both significant challenges and unique opportunities. While increased input costs can lead to margin erosion, they also provide manufacturers with the chance to rethink their value propositions and leverage market positioning to capture share and strengthen their competitive edge. This chapter focuses on how manufacturers can strategically position themselves to thrive in a tariff-influenced environment.
To maintain customer loyalty and justifiable pricing in an environment with rising costs, manufacturers must emphasize the qualities that make their products worth the premium.
Even as tariffs increase costs, manufacturers can gain market share and improve margins by targeting specific market segments and focusing on value-driven strategies. Here are ways to maintain competitive advantage:
Supplier negotiations become more critical in a tariff-driven environment. Rising costs for raw materials and components directly impact manufacturers’ bottom lines, and strong supplier relationships can help mitigate this impact.
While tariffs may initially seem like a burden, manufacturers can turn these challenges into an advantage by strategically positioning their brand and operations to outperform competitors.
Manufacturers that take a proactive approach by optimizing value positioning, adapting supply chains, and leveraging innovation can transform tariff challenges into opportunities for growth and market leadership.
The automotive industry is one of the most complex and globally interconnected sectors, heavily reliant on international supply chains. Tariffs can significantly disrupt cost structures, especially for manufacturers that depend on raw materials like steel and aluminum, as well as complex components sourced from various countries. Reports share the broad-reaching implications including rising costs, job losses, and production disruptions6. This chapter will explore how automotive manufacturers can strengthen their supply chain resilience, adjust their sourcing strategies, and adopt pricing approaches that protect margins and preserve customer relationships in the face of tariffs.
One of the most effective strategies for mitigating tariff-related risks in the automotive industry is to diversify the supplier base. A more diversified supplier network reduces the reliance on any single country or region, minimizing exposure to tariffs.
As tariffs increase, automotive manufacturers are incentivized to reconsider the geographic location of their production and assembly facilities. Nearshoring or shifting production closer to key markets can help mitigate the impact of tariffs while providing other strategic benefits.
Tariff-driven cost increases inevitably place pressure on pricing. Automotive manufacturers must carefully balance margin protection with customer satisfaction and competitive positioning.
By combining supply chain flexibility with thoughtful pricing execution, automotive manufacturers can maintain profitability, protect brand equity, and continue delivering value to customers — even in a tariff-heavy trade environment.
Food and agriculture industries are particularly vulnerable to tariffs due to their dependence on global supply chains, seasonal production cycles, and price-sensitive markets. Tariffs on fertilizers, livestock feed, grains, and food commodities can lead to cost escalations, disrupt trade flows, and create uncertainty for producers and consumers alike. Additionally, retaliatory tariffs from foreign markets can limit export opportunities, leaving domestic producers with surplus stock and depressed prices.
Tariff-related volatility requires more than operational adjustments — it demands proactive pricing and financial planning to manage uncertainty and protect margins.
By combining smart sourcing decisions with robust pricing execution and financial hedging, agricultural and food businesses can protect themselves against the unpredictability of tariffs. Success in this sector depends not only on what is grown or produced — but also how nimbly businesses manage price, supply, and market access in a constantly shifting global landscape.
Businesses reliant on raw materials are often among the first to feel the impact of tariffs. Whether it’s steel, aluminum, timber, chemicals, or rare earth elements, even small changes in trade policy can cause significant cost volatility. Because these materials are foundational to so many industries — construction, energy, manufacturing, transportation — the ripple effects can be widespread and difficult to contain.
Companies in this space must adopt proactive, diversified strategies to protect margins, ensure supply continuity, and maintain pricing competitiveness in a tariff-impacted environment.7
To maintain competitiveness and customer loyalty in a tariff-inflated environment, raw material businesses must evolve beyond traditional cost-plus pricing. Strategic pricing, coupled with smart commercial agreements, can help share risk, improve transparency, and strengthen long-term relationships.
By structuring pricing models that reflect real-time market dynamics and incorporating rebates, surcharges, or subscription-like offerings, companies can preserve margins while giving customers the predictability and flexibility they need to plan ahead. The following strategies highlight how pricing and agreements can become powerful tools for navigating tariff volatility:
To further insulate operations from tariff volatility, businesses in the raw materials sector should adopt financial and contractual strategies that hedge against risk. These tactics provide stability in uncertain markets and can serve as a buffer against abrupt cost increases or supply chain disruptions driven by shifting trade policies.
For raw material–intensive businesses, pricing confidence and commercial agility are critical to navigating tariff-related uncertainty. Through transparent and flexible pricing structures, creative customer agreements, and risk-sharing models, companies can offset cost shocks while maintaining strong commercial relationships. Paired with sourcing diversification and hedging tools, these strategies form a robust playbook for margin preservation and long-term stability.
Tariffs are an ever-present risk in global trade, but businesses that take a proactive approach to pricing, commercial and supply chain strategy can mitigate their impact. The key to success lies in agility — understanding market shifts, adjusting strategies quickly, and effectively leveraging agreements and commercial strategies effectively.
Businesses across all industries can leverage technology to anticipate and adjust their strategy to mitigate the impact of tariffs.
Beyond traditional pricing strategies, advanced commercial tools like rebates, pricing agreements, and subscription models offer tactical and strategic flexibility when navigating tariff volatility:
Tariff-related disruption often unfolds rapidly, requiring businesses to respond in near real time with coordinated adjustments to pricing, supply chain, and commercial strategy. Technology — particularly AI and advanced analytics — enables this kind of agility at scale.
AI-driven pricing and CPQ solutions offer businesses predictive insights and dynamic decision support. By leveraging neural network-based price optimization, businesses struggling with high complexity and navigating dynamic environments can model the impact of tariffs on cost structures, identify the optimal pricing response for customers and the win rate probability, and streamline the deal negotiation process and pricing strategies based on margin thresholds or competitor signals. This technology enables businesses to:
In a tariff-influenced world, companies that rely solely on manual processes and static price lists will struggle to keep up. By embedding AI into the commercial stack, businesses gain a strategic edge — turning volatile trade conditions into a competitive differentiator in their go-to-market execution.
Navigating the complexities of tariffs requires a strategic and informed approach. While tariffs can introduce cost pressures and market disruptions, they also create opportunities for companies that can adapt quickly and effectively. The most resilient businesses will be those that integrate pricing intelligence, optimize supply chains, and leverage technology to make smarter decisions.
The key takeaway from this playbook is that tariffs are not a one-size-fits-all challenge. Each industry and business model must tailor its response to its unique market position, cost structure, and customer base. Whether it’s distributors executing dynamic pricing adjustments, manufacturers redefining their value proposition, or agriculture and raw material businesses rethinking sourcing strategies, agility and foresight are critical.
As global trade continues to evolve, businesses must remain vigilant, adaptable, and proactive. Those who remain agile amidst tariff-related disruptions will emerge stronger, more competitive, and better positioned for future growth. By following the strategies outlined in this playbook, companies can turn challenges into advantages and drive long-term success in an increasingly complex economic landscape.
