The Next Wave of Tariff Strategies for Modern Consumer Brands
Old customs tools, suddenly worth the trouble
The tariffs you rebuilt your supply chain around last year may no longer legally exist. The pressure that made you do it still does.
The Supreme Court struck down the "Liberation Day" tariffs in February. Refunds are already being processed.
The tariffs didn't really leave. They came back wearing different badges: Section 232, Section 301, Section 122.
97% of small brands deployed a tariff strategy this year. A lot of them bought more inventory, further out, with the same visibility they had before.
Best Buds at your service, catching some waves 🌊🌊🌊
First, The Revolving Door
Tariffs spent the last year in a revolving door. Give it thirty seconds, and you'll have your bearings.
Last year's big tariffs were struck down and are being refunded right now, about $166 billion of them. So if you paid them, ask your broker what's owed back. The 10% tariff that replaced them got ruled illegal too, except you're still paying that one while the government appeals, and it's set to expire in late July regardless, right about when the next round is expected to land.
Celebrate? Panic? Throw your hands in the air?
Lock in. Duties on steel, aluminum, and Chinese goods never flinched through any of this, and something new is always being drafted to replace whatever just fell. The rate keeps changing, and it never goes to zero. That's the whole game for 2026: build an operation that can absorb a hit it can't predict.
So the question shifts from "how do I dodge a specific tariff" to "how do I make my operation resilient to whichever tariff lands next"? Here are four moves, in order of leverage for a brand doing $1M to $10M.
1. Buy Ahead Only Where the Duty Beats the Carrying Cost
Highest leverage. Applies to almost every brand.
In light of an impending trade war, the move was to buy deeper and forecast further out. Roughly three-quarters of small brands extended their planning horizons in response to tariff uncertainty. Applied across the whole catalog, this strategy is a bet weighing the trade-off between a duty bill and a storage bill, plus the risk of having cash locked in stale inventory. Buying ahead only protects margin when the duty you save per unit beats what it costs to carry the unit; therefore, the strategy is best applied thoughtfully:
Replenishment SKUs are your proven winners on repeat. These SKUs are dependable and allow you to establish a DOS (days of supply) against real sell-through historicals. Because you can trust the product will move, buying ahead of a duty strike pays off, especially if an increased MOQ price break is in play, and assuming the discount plus the duty saved can cover the cost to carry. Your hero SKU is the strongest case of all, rarely marked down and fast enough to burn down a big order before storage eats the savings.
New SKUs are higher risk because they lack historical data to demonstrate sell-through. Going deep on an unproven SKU may leave you with
Who it works for: Brands that use historical data to determine how deep to go with heroes and newness strategically. This approach is nothing new; it's the same science, just now applied to longer horizons. MeUndies is a great example: its membership program feeds a steady pulse on conversion, returns, and demand, so an early buy on a core style is a calculation, not a hope.
Who it doesn't: Honestly, everyone should be doing this, but only if they have adequate, trustworthy historical data. Until then, everything is considered a test of newness until demand is established.
Take your highest-duty SKU. Is the duty you'd save by buying six months ahead bigger than six months of storage plus tied-up cash? If you don't know, you're not buying ahead. You're guessing ahead.
2. Read Your Own Codes Before Customs Does
High leverage. Wildly underused by small brands.
Sections 232 and 301 are charged under the HTS code. That means your duty rate is decided by a classification most founders set once, years ago, and never revisit, often chosen by a broker who was moving fast. Products change. Codes don't get revisited. And the same item can sometimes qualify for more than one code depending on how it's made, packaged, or described.
A real classification review, backed by a binding ruling, regularly surfaces a compliant lower-duty code. The more deliberate cousin of this is tariff engineering: small, legitimate changes to a product's materials or construction that move it into a lower-duty category.
The classic examples are worth knowing because they show how small the change can be. Converse added a thin layer of felt to the soles of its Chuck Taylors, thereby reclassifying them from athletic shoes to slippers and dramatically reducing the duty rate. Columbia Sportswear designs small pockets below the waistline on certain shirts, shifting them into a lower-duty classification. These aren't loopholes. As one customs attorney told CNBC, tariff engineering is one of the few legitimate levers a brand has to reduce its duty liability. With Section 232 and Section 301 affecting more consumer categories than before, more brands are reaching for them.
Who it works for: Any brand importing physical goods that hasn't had a classification reviewed in the last two years. The engagement with a professional runs a few thousand dollars and frequently pays for itself on the next container.
Who it doesn't: Brands manufacturing domestically, and brands that have already done a recent, documented review. Tariff engineering also isn't for anyone unwilling to pay for counsel.
Is tariff engineering a move for you? Find a customs attorney, and get your product team involved for a strategic review. A redesign of your hero SKUs could pay off tremendously.
3. Park the Duty Until You Know More
Strong in specific situations. Not for everyone.
Bonded warehouses or Foreign Trade Zones let you bring goods into the country without paying duty for up to 5 years, or when they leave the zone for commercial use (whichever comes first). In an environment where a tariff might expire in July or double in September, that timing flexibility is its own form of insurance.
It isn't free. Bonded storage runs 40 to 60% higher than standard warehousing, and bonded fulfillment costs more because it requires specially certified staff. So the math only works when the duty you're deferring is large enough to clear that premium.
Who it works for: Brands with high-volume, high-duty imports on core product, especially if you have meaningful international sales. Goods you re-export from a bonded facility can skip U.S. duty entirely.
Who it doesn't: Thin-margin brands where the storage premium eats the duty savings, and low-volume importers where the compliance overhead isn't worth the trouble.
There isn't enough of a proven business case for FTZs and SMBs. Exploring FTZs for SMB strategies is something BB is willing to dive into and validate with the right partner.
4. Pay Duty on the Factory Price, Not Yours
Medium leverage. Real money where it applies, and it applies to fewer brands than you'd hope.
If you buy through a trading company or sourcing agent rather than directly from the factory, the First Sale rule may allow you to calculate duty on the factory's price to the middle-party rather than on the price you paid.
In one case documented by trade attorneys, a U.S. electronics brand buying through a Hong Kong middleman established a factory price of $3.50 against the $5.75 it actually paid, Customs accepted the valuation, and the brand saved close to 25% on duty across a $10M product line.
Who it works for: Brands with a middleman in the chain. If there's an agent or trading company between you and the factory, there may be a First Sale opportunity.
Who it doesn't: Brands buying direct from the manufacturer, because there's no earlier sale to document. And it's viable in only about half the cases that trade attorneys evaluate. It demands complete paper: invoices, contracts, bank transfers, shipping records, all of it, all the way down.
Side note: I have always based duties on First Cost and am a bit surprised that brands are only now learning this through trade attorneys. Would be interested in hearing from someone who currently works via a trading company or sourcing agent.
When you stay ready, you don’t got to get ready.
Tariff strategy is far from a one-and-done event. Today's rate could be gone by August and back in some new form by fall.
Deploying a new tariff strategy or checkpoint doesn’t have to be a huge pivot. Start with the one SKU and one strategy that will deliver the most impact in the shortest time.
Then take it one step further and incorporate each of these approaches into your supply chain operations. Forecast, product launch, and replenishment order runs through:
Planning horizon and carrying cost assessment
HTS Code validation and tariff engineering
First Cost check on that commercial invoice
FTZ opportunities as they evolve
Baking these strategies into your operations is not only smart, it’s also critical to sustain and protect margin in an ever-evolving market saga.
At your service…
Best Buds CX is a fractional COO partnering with bold brands built on core values. We implement customer-retaining operations across the business that empower teams to operate at their highest potential so you can reclaim your time, energy, and ambition. Learn more.
