As the new presidential administration takes shape, small to medium-sized businesses (SMBs) are closely monitoring shifts in trade policies. Tariff changes can significantly impact all supply chains, but SMBs typically have tighter profit margins. This makes them especially vulnerable to even slight cost increases from tariffs, which can have a significant impact on their profitability.
Given the evolving trade landscape, SMBs must stay proactive to navigate these changes effectively. Here are four key strategies to help SMBs manage tariff and policy shifts:
- Leverage financial tools to manage tariff costs
Tariffs can throw a wrench in your cash flow, but there are steps you can take to reduce the impact. One way is to build strong credit relationships with suppliers and take advantage of automated payment solutions like ACH and Periodic Monthly Statement programs with the U.S. Customs and Border Protection to avoid extra fees and speed up transactions. Also consider duty drawback programs as they can help recover costs on re-exported goods. And when it comes to pricing, find the right balance between absorbing costs and adjusting prices so your business stays competitive without taking a big hit. - Ensure proper customs compliance and bonds
SMBs need a customs bond to import goods worth $2,500 or more into the United States. Bonds act as a financial safety net to guarantee your duties and fees are covered. These bonds are determined based on the duties paid throughout the calendar year—the higher the duty, the higher the bond must be. Work with a licensed customs broker or surety company that can help structure your bond correctly and keep it in good standing amid these policy changes. Taking these steps upfront can save you from unexpected fees and frustrating shipment delays down the road. - Diversify your supply chain
Consider diversifying your supply chain to include suppliers from countries with lower or no tariffs. This change can reduce the impact of tariffs on your overall costs. Logistics providers like C.H. Robinson can help identify and establish relationships with new suppliers. - Leverage experts to stay on top of changing policies
Many SMBs lack dedicated compliance and trade teams, making it challenging to stay updated on evolving trade policies. SMBs should rely on trusted sources such as trade organizations, logistics providers, and government agencies to make informed decisions. Working with a reliable logistics provider – instead of unreliable internet sources – can also help you access expert guidance and avoid misinformation that could lead to costly mistakes.
SMB shippers face unique challenges when navigating the uncertain future of trade and tariff policy shifts. By leveraging experts like C.H. Robinson, they gain the personalized service levels they need with the benefit of the technology, scale, and expertise of a global leader. Atlantic Track, a leading manufacturer of complex railroad components, describes the value of both personalization and scale:
“C.H. Robinson understands small business. They understand that it’s relationship-driven. There are multiple hats being worn by multiple people. We want to be able to pick up the phone, get a hold of somebody, talk it through, and get the job done. C.H. Robinson does that. At Atlantic Track, we have a saying, ‘you can only do good business with good people.’ I’ve had the luxury of getting to know many different layers at C.H. Robinson. I can tell you they’re good people. When you have good people, you can make good things work.”
Stay informed on what’s happening with tariffs at our new trade and tariff updates page or check out recent, highly popular "Navigating the New Tariff Landscape" webinar and get in touch with one of our supply chain experts.
