Despite tariffs, U.S. companies will succeed

A looming tariff increase does create uncertainty, and corporations, particularly big-box retailers, are busy assessing financial impact, trimming profit outlooks, and planning more conservatively.

They’re also looking to suppliers to help absorb increased costs and are exploring sourcing from other countries.

Because Chinese imports sold in America have substantial profit margins, businesses are more likely to cut margins rather than pass the cost to consumers.

Unfortunately, extremely lean, low-margin businesses will feel the heat more than larger, higher-margin, corporations. Low-margin companies have less flexibility and will rely more heavily on suppliers and consumers to shoulder additional costs.

Still, even in this case, a price increase will be a measure used in combination with an assortment of cost-absorbing tactics, and in no way will create the doom-and-gloom economic scenario some pundits predict.

Navigating uncertainty and staring down challenges is what successful American businesses do.

Chinese import tariffs may sting, but a determined, entrepreneurial spirit will continue to spur long-term success for companies that have healthy margins, while creating a challenging environment for companies that have tighter margins and price-sensitive consumers.

While talking heads on each end of the political spectrum debate the impact of additional tariffs on Chinese imports, American retailers will innovate by changing and tweaking their business plans. to operate and ultimately succeed in a more challenging economic environment.

Chinese import tariffs may sting, but a determined, entrepreneurial spirit will continue to spur long-term success for companies that have healthy margins.