A year ago this spring, the Liberation Day announcement turned import duties from a background cost into a daily worry for shop owners, makers and online sellers. Many of them are still paying the bill, whether in higher prices, thinner margins or postponed plans.
In this article we will explore what owners say the tariffs have done to their costs, how the refund fight is unfolding, how to work out landed cost, and which practical steps are helping smaller firms stay steady.
Owners Describe Costs Arriving From Every Direction
When a reporter at Yahoo Finance spoke with owners connected to the We Pay the Tariffs coalition, the same theme kept surfacing: there was no single line on the invoice to blame. Duties touched almost everything a small company buys, and they touched it at several points along the way. That matters because a business can negotiate or absorb one rising cost, but it struggles when everything climbs together.
Materials, Finished Goods and Freight
Matt Cagle of Rig’Em Right described costs hitting “from every direction: raw materials, finished goods and freight.” That phrase is a fair summary of how a tariff travels through a supply chain. A manufacturer pays more for imported inputs, a wholesaler pays more for finished items, and the carrier moving those goods adjusts its own pricing as volumes and routes change.
Freight deserves its own attention because owners rarely plan for it. The accounts gathered in the report describe smaller orders, delayed shipments and shifting supplier networks. A shop that used to receive one large container now might receive several smaller deliveries, each with its own handling charges, and each at the mercy of a different schedule.
A practical way to spot freight creep is to compare the per-unit shipping cost on your last three orders. If the figure is rising even though the supplier price is flat, the cause is probably smaller loads, rerouting or storage delays, and the fix may be as simple as agreeing a consistent shipping schedule. Ask your forwarder how order size changes the rate, because the break points are often lower than owners expect.
Prices and Hiring
Ryan Guay of FLATED said landed costs rose quickly and forced the company to raise prices. He also said hiring plans were put on hold. Those two decisions are linked: when a firm raises prices, it risks losing customers, and when it expects fewer sales or tighter margins, adding payroll becomes harder to justify.
A price increase is also not a clean fix. Customers compare, and a small seller competing with a large retailer rarely has the cushion to absorb costs for months. A common pattern is two steps, first absorbing the hit as long as they can, then raising prices once the cash runs thin.
Cash and Equipment
Kacie Wright of Houghton Horns said tariffs tied up cash and delayed inventory and equipment purchases. Her line stays with me: “we can’t do that until we know tariffs are truly gone.” It describes a quiet cost that never shows up in a tariff percentage, which is the investment a business chooses not to make while the rules keep moving.
Inventory decisions suffer in a similar way. Ordering more to get ahead of a possible increase ties up cash, while ordering less risks running out and paying more later. Neither choice is clearly right, which is why this period is so draining.
Duties are usually paid when goods enter the country, which means the cash leaves the business well before the product sells. For a firm that turns inventory slowly, that gap can be the difference between a comfortable month and a stressful one. A freezer, a press or a new machine that would have raised output gets deferred, and the lost productivity compounds.
The emotional side deserves a mention too. Owners in this position make decisions under a cloud, such as whether to sign a lease, hire an assistant or place a larger seasonal order. When the rules can shift between the time you order goods and the time they arrive, ordinary planning starts to feel like gambling. That strain is part of the cost, even though no spreadsheet captures it.
The Refund Question Hanging Over Duties Already Paid
The coalition behind the report estimates that businesses paid about 140 billion dollars in duties that were later struck down. That figure is the coalition’s own estimate, so treat it as an advocacy group’s number rather than an official accounting. Even so, it conveys the scale of money that may be owed back to importers of every size.
According to the report, the Supreme Court issued its decision in February, and refunds had still not been issued more than a month later. No refunds had been paid at the time of the reporting. A ruling that duties were unlawful and a check arriving in a company’s account are two different events, separated by process, paperwork and administrative decisions that owners cannot control.
Why a Court Win Does Not Equal Cash
In practice, refund mechanics depend on how the government chooses to administer repayment, who qualifies, and what documentation importers must supply. Customs entries are processed under strict rules, and past entries can be finalized after a set period, which is exactly why a customs broker will tell you to act early. Nobody can say yet exactly how a refund process will work for any given importer, so expect the details to be announced separately.
There is also a middle layer. Many small firms do not import directly. They buy from a distributor or a larger brand that was the official importer, which means the refund may legally belong to someone else, even though the small firm effectively paid through higher wholesale prices. Whether any of that money flows downstream is a matter for contracts and negotiation, not for a ruling.
What Owners Can Do While Waiting
The sensible step is to treat the refund as a contingent receivable, not as income. Gather every entry summary, broker statement and duty payment record now, while they are easy to find, and store them where an accountant can reach them. If a refund process opens, the businesses with organized records will be at the front of the line, and those hunting through old emails will be behind.
Another useful habit is to note, for each duty payment, which product line it related to and which customer orders that stock later filled. If you eventually need to show how duties flowed into your costs, a clear trail makes the conversation with an accountant shorter and cheaper. It also helps you judge whether chasing a modest claim is worth the time.
A word of caution on accounting. How and when a possible refund appears in your books is a question for a qualified accountant, not for a news explainer. The same goes for any legal claim; this article is general information, not legal advice.
Landed Cost Math That Shows What a Tariff Does to a Product
Owners who cope best tend to share a habit: they know their landed cost for each product, not just the factory price. Landed cost is everything it takes to get a unit onto your shelf, including the purchase price, freight, insurance, duties, brokerage fees and handling. If you only track the factory quote, a duty change can erode your margin without anyone noticing for a quarter.
Building the Number
Start with the unit price, then add the freight and insurance for the shipment divided by the number of units. Add the duty, which is generally calculated on the declared value of the goods, then brokerage and port or warehouse fees. The result is your true unit cost, and it is the number that should drive pricing.
Here is a simple illustration with invented round numbers, only to show the mechanics. If an item costs 10 dollars at the factory, 1 dollar for freight and a duty of 25 percent applies to the 10 dollar value, the duty adds 2.50 dollars, pushing the landed cost to 13.50 dollars before brokerage. A seller that priced the item at 20 dollars has gone from a 10 dollar gross margin to 6.50 dollars, a drop of 35 percent, from a duty that sounds modest.
A Table to Keep Beside Your Spreadsheet
The table below lists the components worth tracking per product, how they respond when tariffs shift, and the question to ask yourself.
| Cost component | How tariffs affect it | Question to ask |
| Factory price | Suppliers may raise quotes or share the burden | Is the quote in writing, and for how long? |
| Freight and insurance | Smaller or delayed shipments raise per-unit charges | Could I consolidate orders without tying up too much cash? |
| Duty | Applied to declared value, so supplier price changes also change duty | Is the classification and value on my entries correct? |
| Brokerage and fees | Rises when more entries or rule changes add paperwork | Does my broker charge per entry or per line? |
| Cash timing | Duty is due early, long before the sale | How many days of inventory am I financing? |
| Selling price | Increases may reduce volume | What is my break-even volume at the new margin? |
Updating this sheet monthly takes less than an hour once it is built, and it turns tariff news from a source of dread into an input. When a headline announces a change, you can plug in the new rate and see the effect on each product within minutes. That speed is an advantage over competitors who are still guessing.
Notice that the duty line is not only a rate. It interacts with value, classification and the timing of payment, which is why a quick conversation with a customs broker can save more than it costs. If the same product could be classified two ways, the difference may be real money, and only a professional should make that call.
Supplier, Contract and Pricing Moves Owners Are Making
The report quotes Andy Payne of Down Decor, who said his company switched suppliers, adjusted pricing and renegotiated contracts, and that what the business needs is “stability and predictability.” That list is a compact version of the standard small-business response, and each piece has its own logic and its own limits.
Switching and Spreading Suppliers
Moving to a new supplier sounds simple, but it carries hidden costs: sample rounds, quality checks, minimum orders and learning curves. The more durable approach for most small firms is diversification, meaning that you keep a primary source and qualify a second one before you need it. Even a small test order from a backup supplier tells you about quality, communication and lead times at low risk.
A warning from experience: do not choose a new source on price alone. A cheaper quote from a country facing different duties can reverse quickly if rules change again, and a supplier with a weaker track record can cost more in returns than it saves in tariffs. Weigh reliability and the stability of the trade rules between that country and your own.
Pricing With a Clause in Mind
Pricing is where many owners hesitate, because nobody wants to be the first to raise prices. A practical middle path is to build a tariff or cost-adjustment clause into contracts with business customers, tying price changes to documented duty changes. For consumer sales, clearer communication helps, since customers who hear why a price moved tend to react better than those who just see a higher number.
Some owners split the difference by changing pack sizes, bundling slower products with popular ones, or trimming the lowest-margin items. Which approach works depends on your customers and your category, and testing on a small segment first beats a company-wide change.
Renegotiating Terms
Timing matters as much as wording. Raise these topics when you are placing a healthy order or renewing a relationship, not in the middle of a dispute. Contracts are not only about unit price. Payment terms, minimum order quantities, lead times and who bears the cost of rule changes all matter. Asking a supplier for longer payment terms can ease the cash squeeze from early duty payments, and offering a longer commitment in return can make the ask reasonable.
One more angle is the supplier’s own exposure. A manufacturer that depends heavily on a single export market may be willing to share part of a duty increase to keep your orders, while one with plenty of demand will not. You will not know until you ask, and a polite request backed by your order history costs nothing. Suppliers often respond better to a specific proposal, such as splitting an increase evenly for one quarter, than to a general complaint.
Make sure any agreement states plainly who pays if duties rise or fall during the contract period. Ambiguity here is how disputes start. A lawyer should review anything with significant exposure, and I would not rely on a template found online for a large purchase agreement.
Replacement Tariffs and Why Uncertainty May Last Through 2026
One reason owners are not celebrating the court outcome is that the duties that were struck down have, in many cases, been replaced. According to the report, new tariffs under other trade authorities, namely Sections 122, 232 and 301, have taken the place of many of the old duties. Owners quoted in the coverage expect uncertainty to continue through 2026.
How the Replacements Differ
These sections of US trade law work in different ways. Section 232 is generally tied to national security investigations of specific product categories. Section 301 is associated with findings of unfair trade practices by particular countries. Section 122 is a more temporary tool linked to balance of payments concerns. I am describing these in general terms from stable background knowledge, and the details of how each is currently applied to specific goods change, so check with a broker for your product codes.
The practical lesson is that the legal label matters less to a shopkeeper than the effect: a duty that is product-specific behaves differently from one that is country-wide, and one with a time limit creates a different planning problem from an open-ended one. Owners should ask, for each major product, which authority applies and whether it has an expiry or a review date.
Planning Without a Forecast
Nobody can promise how trade policy will move, and anyone who sounds certain deserves some skepticism. So the realistic goal is resilience, not prediction. That means building models with a low, middle and high duty case, keeping some flexibility in orders, and avoiding commitments that only work if the lowest case holds. A business that can survive the high case will sleep better even if the middle case occurs. Write the three cases down with a rough monthly cash impact for each, so the conversation with your bank or partner is about numbers rather than worries.
Another consequence of the shift is that the replacement duties apply in different ways to different goods, so two businesses in the same town can face very different bills. A bookseller, a furniture maker and a pet-supplies shop each buy from different supply chains, and one broad headline rarely describes any of them. That is why owners in the coverage keep asking for stability and predictability rather than for any particular rate.
This is also US-focused reporting. Readers elsewhere face their own tariff regimes, and exporters to the United States face a different version of the problem, with customers who may push for price cuts to offset duties. The principles of landed cost, diversification and documentation carry across borders, but the specific rules do not.
Customers React to Price Changes in Ways Owners Rarely Predict
Raising prices is the decision that keeps most owners awake, and it helps to separate three audiences. Loyal repeat customers usually tolerate a modest increase if you explain it. Price-comparison shoppers will leave quickly if a competitor holds steady. Wholesale buyers care about predictability and will often accept adjustments if they are scheduled and documented.
A short, factual note works better than a long justification. Saying that your supplier costs and import duties rose, and that you are adjusting a few prices to keep the product available, is honest and usually enough. Avoid blaming language, because customers have heard it from every direction and tend to tune it out. Giving advance notice of an increase can pull orders forward, which helps cash for a few weeks but may leave a quiet stretch afterward. If you try it, plan inventory for the dip.
Competitors face the same duties, but not always the same ones. A rival that sources from a different country, or that buys through a large distributor with its own contracts, may hold prices longer. A simple test is to buy a competing product yourself, check where it was made, and estimate its landed cost. That exercise often shows whether a rival’s low price is sustainable or a temporary promotion.
Once you know where you stand, decide which products are worth defending at a thin margin because they bring customers in, and which should carry a healthier margin because customers buy them without comparing. Not every item deserves the same treatment, and a uniform percentage increase is rarely the smartest answer.
A Sensible Order of Steps for the Next Quarter
If you run a small business and feel overwhelmed, the answer is not a grand strategy. It is a short sequence that you can finish in weeks, starting with whatever gives you information fastest.
First, Know Your Numbers
Rebuild landed cost for your top ten products, or the products that generate most of your gross profit. This single exercise usually reveals one or two items quietly losing money. Decide what you will do with them before touching anything else, whether that means a price increase, a supplier change or a pause.
Second, Protect Your Cash
Check how many days of inventory you carry and how much cash is locked in duties. A buffer of several weeks of operating expenses, if you can build one, gives you room to make decisions without panic. Talk to your bank before you need credit, not after, since lenders respond better to a prepared owner.
Third, Organize the Paperwork
Keep entry documents, duty payments, broker statements and supplier invoices in one folder, labelled by month. This is the lowest-effort step on the list and the one most likely to matter if a refund process opens. Ask your accountant how long to retain records for your situation.
Fourth, Talk to the Professionals
A customs broker can check classification, valuation and which authority covers your goods. An accountant can advise on how duties and possible refunds are treated in your books. A lawyer can review contracts and refund rights. None of them can see the future, but they can keep you from avoidable errors.
Then, Review Your Product Mix
Once the numbers are on the page, look at which products justify the effort. Items with high duty exposure and low margin are candidates for redesign, substitution or retirement. Items with local or domestic inputs might deserve more shelf space and promotion, since their costs are steadier. This is not about abandoning imports, only about knowing where your risk sits.
Finally, Plan in Scenarios
Write down what you would do if duties fall, stay flat or rise further over the next six months. Having the plan on paper, with trigger points such as a specific cost increase, makes it easier to act when the moment arrives. Revisit it quarterly, because the picture changes quickly.
Frequently Asked Questions
Can small businesses get a refund on tariffs they paid?
Refunds for duties that were struck down were still pending when the reporting was published, and no process details had been confirmed. Importers of record are generally the ones with the strongest claim, so ask your customs broker or accountant whether you qualify.
What is landed cost and why does it matter?
Landed cost is the full price of getting a product to your shelf, including the item price, freight, insurance, duties and fees. It matters because pricing based on the factory quote alone can hide a falling margin.
Should I raise prices when tariffs go up?
Not automatically. First check your landed cost, your competitors and your break-even volume, then test a modest change on a small segment of products or customers before applying it widely.
How can a small business reduce tariff risk?
Qualify a second supplier, keep a cash cushion, add cost-adjustment language to contracts and review each product’s duty exposure with a broker. No single move removes the risk, but together they make it manageable.
Do I need a customs broker for a small import business?
Not always, but many small importers find one worthwhile, especially when classification or valuation is uncertain. A broker can also help you keep documentation that may matter if duties are refunded.
Will tariffs keep changing in 2026?
Owners quoted in the coverage expect uncertainty to continue through the year, partly because new duties under other trade authorities have replaced many of the old ones. Plan for several scenarios rather than a single forecast.
