With discussions heating up around new tariffs on imports—particularly from China—U.S.
brands face a critical question : how to adapt supply chains without squeezing margins or raising
prices in ways that disrupt customer loyalty. Tariffs may seem like a blunt policy tool, but their
impact on everything from sourcing to pricing strategy can be complex, significant, and lasting.
Who Decides on Tariffs?
While tariff changes are often presented as top-down decisions, they require multiple layers of
review and approval. Although the President can push for adjustments, only Congress has the
authority to enact taxes and tariffs. Even then, there are procedural hurdles: economic
assessments, stakeholder consultations, and public comment periods that ensure decisions are
made with as much data as possible.
However, certain measures—such as Sections 232 and 301 of trade policy—can be fast-tracked
if justified as protecting national security or economic stability. Despite the speed these
channels offer, tariffs aren’t enacted overnight. This time lag gives retailers, DTC brands, and
their suppliers a critical window to pivot before costs change drastically.
Potential Impact on Supply Chains and Costs
For brands in fashion, home goods, and consumer products that depend heavily on imported
goods, the challenge is straightforward: the cost increases that tariffs bring can’t always be
offset by price hikes without risking customer churn. Compounding the issue, scalable domestic
manufacturing alternatives for most products just don’t exist at a level capable of meeting
current demand. This puts the onus on brands to adapt their sourcing and logistics strategies,
especially as tariffs make imports costlier.
The likely result? Retailers and DTC brands will see higher operating costs, reduced product
margins, and limited ability to absorb these increases internally. This leaves the question of
pricing squarely in focus: will brands pass the cost to consumers or take a hit on margins? Each
choice has implications for competitiveness, brand loyalty, and ultimately, profitability.
Mitigating the Impact: Strategic Sourcing Alternatives
To soften the impact of potential tariffs, many U.S. brands are proactively adjusting their
sourcing strategies. Here’s what’s working for some leaders in the space:
Expanding Beyond China : As Section 301 tariffs could extend to even more Chinese
imports, brands are looking to diversify into other Asia-Pacific regions like Vietnam, India,
and Bangladesh. With lower costs and no Section 301 restrictions, these markets offer a
compelling alternative for cost-conscious brands.
Nearshoring for Flexibility : For brands that need to keep production in Asia, nearshoring
fulfillment and logistics operations to Mexico or Canada can reduce transit times and offset
some of the tariff burden. This “near-shore pivot” allows brands to be more nimble in a
volatile market environment and brings fulfillment closer to key customer bases.
Utilizing Trade Policies to Keep Costs Down : Some brands are now strategically
employing Section 321 (de minimis exemption) to lower tariff-related expenses on specific
imports. Understanding and leveraging these nuances in trade law can make a meaningful
difference when scaling under a tight budget.
Adapting for Long-Term Resilience
For brands in high-demand, high-cost categories, surviving this shift requires more than
adjusting sourcing—it demands strategic flexibility. In a landscape where tariffs, regulations, and
economic policies can change quickly, brands that embed agility into their supply chains will be
best positioned to weather changes. Think of this moment as a chance to retool and rethink
sourcing, production, and fulfillment for the next decade, rather than a short-term fix.
If your brand is exploring ways to adapt its sourcing strategy, now is the time to act. Redefined
Logistics can help you identify opportunities and build a more resilient supply chain that
safeguards both margins and market share. Connect with us to learn more about how to stay
ahead of the curve in an ever-evolving economic landscape.
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