Article

Tariffs: Three Keys to Developing a Winning Pricing Strategy

Pricing is one of the quickest-acting tools available to executives, making it critical to any tariff response plan.

By Stephanie Yee and Mark Burton

First published on febrero 28, 2025
min read


Executives across industries are moving quickly to determine the right pricing strategies in response to tariff-induced uncertainty and disruption. It’s complicated because tariffs can both fuel inflationary effects and threaten sales volumes for a business, depending on a complex mix of supply and demand factors that vary by product, region, and sales channel. Tariffs’ inflationary pressures create mounting risks. As prices rise, customers might trade down to lower-margin products. Potential supply constraints could lead to order backlogs and poor customer experiences. Working capital needs grow amid supply chain disruptions and rising costs of labor and product inputs. The ability to pass through rising costs consistently will determine whether businesses can protect their margin profiles. At the same time, overreaching on pricing could lead to softening demand and put top-line growth at risk. As volume growth slows, many companies will be forced to implement reactive discounts, eroding operating margins. Customers may demand price concessions as demand softens, even as they adjust to reduced industrial production. With operating cash flow under strain, leaders must make tough calls on resource allocation to maintain financial resilience. In our work with companies worldwide, the most successful ones use pricing as a primary tool for managing through tariffs and other disruptions. Leading companies focus on three steps: Assess your exposure. Evaluate the financial impact of potential tariff scenarios and your company’s vulnerabilities relative to competitors. Set the pricing strategy. Agree on pricing objectives based on your assessment of the company’s strategic position and risk exposure (both cost and revenues). Execute the right plays. Determine when to go on offense vs. defense across business units, products, and customer segments, and implement pricing moves that will accelerate performance. By taking this three-step approach, companies can navigate tariff disruptions with confidence—protecting margins, sustaining demand, and emerging stronger. The time to act is now. Companies that wait to adjust prices risk damaging profitability while competitors seize the advantage. Read more Pricing Strategies for Volatile Times Caught between a rock and a hard place regarding margins and volumes, B2B companies can avoid getting squeezed by following a three-part plan. Related Brief Tariffs: The Costs of Inaction Trade levies are more than a headline. As tariffs tighten their grip on global commerce, companies must act decisively to mitigate risks and seize opportunities.

Executives across industries are moving quickly to determine the right pricing strategies in response to tariff-induced uncertainty and disruption. It’s complicated because tariffs can both fuel inflationary effects and threaten sales volumes for a business, depending on a complex mix of supply and demand factors that vary by product, region, and sales channel.

Tariffs’ inflationary pressures create mounting risks. As prices rise, customers might trade down to lower-margin products. Potential supply constraints could lead to order backlogs and poor customer experiences. Working capital needs grow amid supply chain disruptions and rising costs of labor and product inputs. The ability to pass through rising costs consistently will determine whether businesses can protect their margin profiles.

At the same time, overreaching on pricing could lead to softening demand and put top-line growth at risk. As volume growth slows, many companies will be forced to implement reactive discounts, eroding operating margins. Customers may demand price concessions as demand softens, even as they adjust to reduced industrial production. With operating cash flow under strain, leaders must make tough calls on resource allocation to maintain financial resilience.

In our work with companies worldwide, the most successful ones use pricing as a primary tool for managing through tariffs and other disruptions. Leading companies focus on three steps:

Assess your exposure. Evaluate the financial impact of potential tariff scenarios and your company’s vulnerabilities relative to competitors.
Set the pricing strategy. Agree on pricing objectives based on your assessment of the company’s strategic position and risk exposure (both cost and revenues).
Execute the right plays. Determine when to go on offense vs. defense across business units, products, and customer segments, and implement pricing moves that will accelerate performance.

By taking this three-step approach, companies can navigate tariff disruptions with confidence—protecting margins, sustaining demand, and emerging stronger. The time to act is now. Companies that wait to adjust prices risk damaging profitability while competitors seize the advantage.

Pricing Strategies for Volatile Times

Caught between a rock and a hard place regarding margins and volumes, B2B companies can avoid getting squeezed by following a three-part plan.

Related Brief

Tariffs: The Costs of Inaction

Trade levies are more than a headline. As tariffs tighten their grip on global commerce, companies must act decisively to mitigate risks and seize opportunities.