A tariff is a tax imposed by a government on imported goods. It is designed to make foreign products more expensive.

Tariffs are paid by importers—typically U.S. companies that bring goods into the country. While foreign exporters do not directly pay the tariff, they may lower their prices to remain competitive. In many cases, businesses pass the cost on to consumers through higher prices.

Tariff revenue is collected by U.S. Customs and Border Protection (CBP) and goes into the U.S. Treasury.

Tariffs can have several effects on businesses, including:

• Higher Costs: Companies that import goods face increased expenses.

• Supply Chain Disruptions: Businesses relying on foreign suppliers may need to adjust sourcing.

• Price Increases: Costs may be passed on to consumers.

• Competitive Shifts: Domestic producers may gain an advantage over foreign competitors.

Yes, businesses can take several steps to potentially minimize tariff impact, such as:

• Exploring alternative suppliers from non-tariffed countries

• Applying for tariff exemptions if available

• Using Free Trade Zones (FTZs) to delay duties

• Reclassifying products under different tariff codes

• Negotiating cost-sharing agreements with suppliers

Companies that rely heavily on imports are most affected, especially in industries like manufacturing, retail, and technology. Businesses that primarily sell domestic goods may benefit from reduced foreign competition.

No, tariffs can change based on trade agreements, government policies, or negotiations with other countries. It’s important to stay informed about policy shifts.

Please view the articles below for more tariff insights or sign up for our news alerts.

• Preparing for Uncertainty: Five Steps for Private Companies to Manage Tariffs  

• Understanding How the Recently Announced Tariffs Can Impact Your Company