How US Companies Are Trying To Protect You From Tariffs
Written by
John Schmoll
Edited by
Rebekah Evans
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Tariffs have dominated headlines since President Donald Trump returned to office in January 2025. While a core part of his agenda, tariffs are a concern for many Americans in the current economic climate. Trump argued that foreign countries pay the cost. In reality, tariffs are paid by American companies and consumers. Neither has faced the full brunt of tariffs yet, though.
However, the average tax on U.S. importers is nearly 18%, up from 2.4% in January, according to the Budget Lab at Yale. Americans are currently paying roughly 5% more on imported goods since the implementation of tariffs, according to Harvard Business School. Here’s how U.S. firms are trying to protect consumers from tariffs.
Many Got Ahead of Tariffs
With Trump signaling the possibility of extensive tariffs, many U.S. businesses stockpiled inventory in anticipation of their implementation. Doing this allowed firms to delay the impact of the tariffs and consumers benefited from that.
“Early on, companies pre-positioned inventory to get ahead of tariffs and isolate consumers, in hopes that the trade war would end before stocks ran out. That gave some short-term protection,” said John Lash, group vice president of product strategy at e2open, a supply chain software platform. While a helpful strategy, it was a temporary solution to a longer-term problem.
Absorb Some of the Cost
As expanded inventories shrink, U.S. businesses face a problem: their input costs increase. There’s no set solution for each firm, as every situation is unique. As is clear from the statistics, firms are absorbing an increase in cost, with consumers facing a lesser impact.
Lash said companies have several options to consider. “Who absorbs this cost depends somewhat on the strategy for each importer. There are three levers companies can pull: pass additional tariff costs through to consumers to protect their margins, absorb these additional taxes to avoid consumer price shocks and a drop in demand or pressure suppliers to absorb some of the cost,” Lash explained. It’s clear up to this point that most firms have borne the brunt thus far, but that can’t last forever.
Apply Pressure to Suppliers
Foreign suppliers and U.S. companies must work together. Larger firms can try to pressure suppliers to split the cost, thereby cushioning the impact for shoppers. “For the largest of buyers, such as the Walmarts and Amazons of the world, suppliers are asked to share some of the pain,” Lash added.
If you’re shopping at one of those retailers, you may pay minimal added cost for now. Smaller firms may not be able to negotiate comparable deals and may need to pass on added tariff costs or absorb it themselves.
Short-Term Relief
Companies’ efforts are delaying, but not preventing, tariff-induced price hikes. Americans have been relatively sheltered from increases, but that won’t last forever, as businesses can only eat added costs for so long. This may result in long-term pain despite short-term relief.
“As the full impact of tariffs works its way through the supply chain in 2026, the net result is clear: consumers will pay more for goods and businesses’ profits will erode. When it comes to the effect on the economy, the crystal ball is cloudy,” Lash said.
Lash also noted that consumer spending has been relatively resilient and the stock market remains strong. Increased impact from tariffs could test that resilience.
For now, U.S. companies are doing what they can to shield Americans from higher prices. Unfortunately, those strategies can only go so far. As tariffs continue to ripple through the supply chains, Americans may see noticeable price increases.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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