With President Trump’s recent election victory, businesses across the U.S. are working to understand how the landscape will shift in the coming years. One of the most significant changes on the horizon? The proposed tariff plan for 2025. 

While designed to prioritize domestic production and stimulate long-term economic growth, these tariffs may create short-term challenges for businesses reliant on imported goods and materials. Whether you’re a small business owner, supply chain manager, or part of the import/export industry, understanding the potential impact of these tariffs—and how to prepare for them—could protect your bottom line and ensure smooth operations moving forward. 

Here’s everything you need to know about the proposed 2025 tariffs and steps you can take to mitigate risk and seize new opportunities. 

What Are Tariffs, and How Do They Work? 

Before exploring the specifics of the new plan, it’s important to understand what tariffs are and how they affect businesses. 

A tariff is a tax imposed by a government on goods imported from another country. The primary purpose of tariffs is to:

  • Protect Domestic Industries: By making imported goods more expensive, tariffs incentivize consumers to buy from domestic producers. 
  • Generate Revenue: Tariffs contribute to government earnings by taxing imports. 

For businesses, however, tariffs often mean higher costs. Imported goods become more expensive, which can lead to increased production costs and higher prices for consumers. This ripple effect can disrupt supply chains, reduce competitiveness, and—in industries reliant on foreign materials or products—even threaten profitability. 

What Do We Know About the Proposed 2025 Tariffs? 

The 2025 tariff strategy, a major part of Trump’s campaign platform, has begun to take shape. While some details remain ambiguous, here’s what we know so far:

  • A 10-20% tariff would be applied to nearly all imports from U.S. trading partners. 
  • Chinese goods could face even steeper tariffs, ranging from 60% to 100%. 
  • The plan aims to bolster manufacturing within the U.S., incentivizing businesses to produce domestically rather than relying on international trade. 

This strategy reflects broader efforts to reduce dependence on global supply chains and promote domestic economic growth. However, for businesses importing raw materials, supplies, or finished goods, these tariffs could increase costs and create significant operational challenges. 

How Tariffs Could Impact Your Business 

Tariffs are likely to affect businesses in different ways, depending on their reliance on imported goods and adaptability. Here’s what you should prepare for. 

1. Increased Costs 

The most immediate effect of tariffs is the increased cost of goods. Businesses that source raw materials, components, or products from abroad will see a rise in acquisition costs. 

For example, take an electronics manufacturer that imports semiconductors from China. A 60% tariff would elevate production costs significantly, forcing the business to choose between raising consumer prices or shrinking profit margins. 

2. Disruptions in the Supply Chain 

Higher tariffs may lead to delays, as some suppliers adjust their operations or pass tariff-related costs directly onto buyers. Longer wait times, material shortages, and challenges in meeting customer demands could all result from such disruptions. 

If your operations rely on just-in-time delivery or lean inventory practices, prepare to reevaluate your strategy to minimize delays and bottlenecks. 

3. Shifts in Consumer Behavior 

When businesses adjust prices to account for higher costs, the ripple effects can be felt by consumers. Higher retail prices may drive customers to delay purchases, switch to alternative products, or reduce spending altogether. 

For example, luxury import retailers may face resistance from a now price-sensitive customer base. Even industries producing everyday goods could experience lower demand as customers juggle rising living costs. 

4. Sourcing Strategy Overhauls 

To avoid absorbing higher costs, many businesses may shift their sourcing strategies. Manufacturers might explore domestic suppliers or import goods from countries not subject to steep tariffs. 

This could involve reshoring certain production processes, bringing them back to the U.S., or turning to nearshoring models that favor U.S.-friendly nations like Canada or Mexico. Such transitions may come at a cost—investments in new facilities, labor, and logistics—but could ultimately prove more sustainable. 

Preparing Your Business for 2025 

Uncertainty surrounding the specifics of the tariff changes can make planning challenging. However, there are proactive steps you can take now to reduce potential risks and position your business for growth. 

Evaluate Your Supply Chain 

Start by identifying which imported goods your business relies on and evaluate their exposure to new tariffs. Can you secure alternative suppliers, or will tariffs significantly impact your costs or delivery timelines? 

Diversify Your Supplier Base 

Consider sourcing materials or products from regions less likely to face steep tariffs. For example, if you’re reliant on Chinese imports, explore other markets or domestic options to maintain affordability. 

Stock Up Ahead of Changes 

If feasible, consider purchasing 2025 inventory before tariff increases take effect. Bulk purchases could reduce long-term costs, while financing solutions (such as subordinated debt options) can help manage upfront expenses. 

Plan Pricing Adjustments Strategically 

Prepare to adjust pricing models without alienating customers. Evaluate options for streamlining operations, cutting unnecessary costs, or enhancing product value as ways to offset price increases. 

Stay Vigilant and Informed 

The proposed tariff plan is still evolving, and keeping up-to-date on announcements will help you anticipate any changes. Proactive planning now could give your business a competitive edge as the details solidify. 

A Roadmap for Success 

While new tariffs may initially bring challenges, they also present opportunities for businesses that prepare strategically. Reshoring operations, diversifying supply chains, and evaluating pricing structures can ensure resilience and growth in a rapidly changing trade environment. 

Want high-level support during these changes? Partner with Avery James Commercial Lending, where our experts can help you secure capital, streamline inventory processes, and build financial resilience ahead of 2025. From strategic sourcing to fast funding, we’re here to prepare your business for the road ahead.