- Companies are turning to consulting firms for help navigating Trump's tariffs.
- Firms are advising them to audit contracts, adjust pricing, and manage costs proactively.
- "Companies have more control than they realize," Shannon Copeland, CEO of SIB consulting, told BI.
If you are confused by what President Donald Trump's tariffs mean for you, you are not alone.
As businesses confront a new era of American protectionism, many are turning to consulting firms for strategies to adapt to the rapidly changing regulatory landscape.
Business Insider spoke to the leaders of some of the world's top consulting firms to find out what advice they give their clients.
Some businesses' first instinct is to pass the cost of tariffs onto the consumer. In March, the Association for Supply Chain Management surveyed 400 supply chain professionals and found that 65% of companies intended to do just that.
Several consultants told BI, however, that blanket price increases aren't always the best move.
Consumers are facing higher prices across the board, so unless the product is a basic necessity, trying to shift the cost will generally result in reduced demand, KPMG's national operations lead, Paul Hencoski, told BI. Ultimately, a business would be forced to cut prices to move stock, he said.
"Companies have more control than they realize," Shannon Copeland, CEO of SIB consulting told BI. As a cost-cutting specialist, SIB aims to help clients avoid overpaying in the areas they can control, so that when prices rise, they're not starting from a place of inefficiency, Copeland said.
"The businesses that fare best are the ones that don't leave their spend on autopilot," he said. "Get proactive and treat tariff exposure like any other enterprise risk."
He advised companies to audit vendor contracts, analyze rate structures, and assess recurring spend for hidden vulnerabilities.
With tariffs restricting supply chain maneuverability, the rapidly emerging topic companies need to be thinking about is "go to market," Boston Consulting Group Global Chairman Rich Lesser told BI.
He said they should be asking questions like: How do you understand your economics versus your competitors? How do you monitor what's happening in real time on a store shelf or in an industrial supply chain? How do you think about pricing for your business?
McKinsey Senior Partner Cindy Levy said some companies may benefit from revisiting prices more often. "Instead of once a year, they may adjust every few months. It's really about managing costs across the value chain, especially when raising prices isn't an option."
Other ways to cut costs include "changing packaging or ingredients, adjusting promotion strategies, or focusing on products that are under less cost pressure," she added.
Kristin Bohl, a PwC partner focused on customs and international trade, offered three broad tips: Create agile strategies, bring the right people together, and model out your impact.
"You cannot make informed decisions about your strategic response to the tariffs unless you know the financial impact of those tariffs on your business," she said. Options for businesses who wanted to avoid raising prices include delaying tariff payments or even getting a refund, she said.
In the short run, "consumers and businesses are likely to share the burden, with more of it falling on consumers over time," researchers at the University of Pennsylvania wrote in a brief on the economic impact of Trump's tariffs.
In early April, Trump announced a 90-day pause on his "reciprocal tariffs," which initially targeted about 185 countries. Since then, the administration has been negotiating with various trading partners, including Canada, Mexico, Japan, and China.
Trump announced an agreement with the UK this month, which includes "billions of dollars of increased market access for American exports," specifically agricultural products, Trump said.
The US and China, meanwhile, also reached an agreement. Both countries agreed to lower tariffs by 115% while retaining an additional 10% tariff, according to a statement by the White House.
That means the United States will remove the additional tariffs it imposed on China on April 8 and April 9, but keep duties levied on China prior to April 2. China, meanwhile, will remove the retaliatory tariffs it announced since April 4 and suspend or remove the non-tariff countermeasures taken against the United States since April 2.
When it comes to preparing for the long term, KPMG's Hencoski said companies need to construct a response team of people from across their organization that can digest all the impacts and develop a plan of action.
Companies are also "using this moment to revisit longer-term decisions around their footprint, suppliers, and even where to invest," Levy said. The smartest among them "aren't just reacting — they're preparing for a future where disruptions are the norm."
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