The New Tariff Landscape: How Pricing Agility Can Be Your Best Defense

Forbes

08-08-2025

Andrew Butt, CEO, Enable.
The escalation of global tariffs is a major inflection point for global commerce. As businesses worldwide prepare for potential impacts, many are evaluating which strategic levers can provide the most immediate protection. While supply chain restructuring offers long-term resilience, a strategic approach to pricing and rebate agility can provide the short-term response mechanism that many businesses require.
The Immediate Challenge
Tariffs create an immediate cost pressure that flows through supply chains at speed. For many businesses, these added costs can significantly compress margins unless addressed proactively. The challenge is particularly acute as tariffs often affect product categories unevenly, creating complex ripples throughout a company's portfolio. This situation requires solutions that can be deployed quickly, with precision and at scale.
The Limitations Of Supply Chain Restructuring
Many organizations are understandably focused on supply chain diversification, shifting manufacturing from China to Vietnam, Mexico or back onshore. While strategically sound for long-term resilience, these initiatives face significant practical constraints:
• Establishing new manufacturing partnerships typically requires months or years
• Regulatory compliance in new jurisdictions adds complexity and time
• Capital investments can be substantial
• Product qualification and quality assurance introduce additional delays
When tariffs take effect, it's difficult for these approaches to deliver the immediate margin protection businesses require.
Strategic pricing adjustments, if implemented strategically, can help provide quicker margin protection while longer-term supply chain initiatives develop. When approached effectively, key advantages include:
• Segmented Impact Assessment: Rather than blanket increases, organizations can analyze tariff impacts across product categories, customer segments and competitive positioning, then adjust pricing proportionally.
• Channel-Specific Strategies: Online, direct and distribution channels often support different pricing approaches. Some businesses maintain pricing in highly competitive channels while recovering margins in less price-sensitive segments.
• Rebate Restructuring: Performance-based rebates that incentivize volume while maintaining margins can help trading partners navigate shared challenges.
The most recent inflationary period during the Covid-19 pandemic provided valuable lessons about pricing responsiveness during uncertainty. Many companies that could rapidly assess cost impacts and implement targeted pricing strategies were able to maintain healthier margins.
In the consumer goods space, P&G implemented quarterly price adjustments that maintained and even grew margins without compromising volume sales. In food and drink, brands including Nestle were able to follow a similar strategy. This ability to make frequent, granular adjustments can help provide organizations with more certainty compared to occasional larger increases.
When navigating tariff impacts, however, it's not enough to just respond quickly and adjust precisely—value must be clearly communicated as well. During the period of high inflation, price rises were being felt across the board, but tensions still mounted, notably between grocers and manufacturers. To avoid the same relationship damage this time, organizations should ensure greater transparency with customers.
The transport sector has done this successfully with its fuel surcharge; as the price of fuel fluctuates, the cost is passed through with total transparency. Few customers or resellers will be surprised that prices are changing as a result of tariffs, but by offering clarity on how the changes are being applied, to which products and when, businesses will feel the benefit, both in the short term during channel negotiations as well as in long-term relationships.
Organizations looking to strengthen their response to tariffs and similar disruptions should consider developing three core capabilities:
1. Analytical Foundation: Develop visibility into cost impacts, cross-elasticity effects and competitive positioning across the portfolio.
2. Partner Collaboration: Build strong relationships with distributors and resellers to help preserve sales volume while protecting margins.
3. Execution Infrastructure: Set up infrastructure for fast, flexible price changes across products and channels, supported by streamlined workflows and more frequent, detailed profit and margin reporting.
These capabilities not only help address immediate tariff challenges but also position businesses for greater resilience against future disruptions.
While today's tariff tensions demand immediate attention, the broader trend toward trade fragmentation appears likely to continue regardless of political outcomes. Building organizational capability to rapidly assess and respond to cost volatility remains valuable long after the current headlines fade.
By combining a pricing response strategy with a long-term approach to enhance commercial capabilities, businesses can better protect today's margins while building tomorrow's advantages to emerge not just intact, but stronger.
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