Tariffs can change quickly. So can supplier pricing, shipping costs, customs requirements, and customer expectations.

For small business owners, the hardest part is this: the uncertainty around what might change next.

Maybe you import materials from Canada. Maybe you’re watching global headlines around trade restrictions, sanctions, or shifting market rules. Maybe your supplier just raised prices, and you’re not sure whether to absorb the cost, pass it along, or wait and see.

You don’t need to become a trade policy expert overnight, but you do need a plan.

A Federal Reserve Bank of Boston analysis found that tariff uncertainty can affect small and medium-sized businesses’ expectations around costs, prices, revenues, profit margins, investment, and hiring.

For local businesses, those concerns often come down to a familiar question: How do we protect our cash flow while planning for what comes next?

Manuel J. Batlle, Associate Director of the Rhode Island Small Business Development Center (RISBDC), encourages businesses to focus on preparation rather than trying to predict every change.

“The objective is not to predict every tariff change. It is to build enough financial and supply-chain flexibility to respond when conditions change.”

Here’s where to start.

Start with what you can control

When trade rules feel uncertain, it’s tempting to freeze. Before making a big decision, start with the parts of your business you can actually see:

• What products or materials are most exposed to imported costs?
• Which suppliers have changed prices recently?
• Which items have the thinnest margins?
• Which orders are time-sensitive?
• How much cash do you need over the next 30, 60, and 90 days?
• What would happen if your costs rose by 5%, 10%, or 20%?

You may not know exactly what tariffs will look like next month. But you can understand how much cost movement your business can handle.

That’s the first step.

Know your numbers before you react

A tariff change can affect more than the price of imported goods. It may also affect supplier pricing, shipping charges, packaging, replacement parts, and finished products.

Manuel recommends reviewing several details before making any major changes: your product’s country of origin, Harmonized Tariff Schedule (HTS) classification, current tariff rate, total landed cost, inventory turnover, margins, and available working capital.

The U.S. International Trade Commission maintains the Harmonized Tariff Schedule used to classify imported merchandise and determine applicable tariff rates. Businesses should review their specific products and consult a customs broker or qualified trade professional rather than making decisions based on headlines alone.

Then bring the question back to your business: Can we absorb this cost, adjust around it, or do we need to change something?

Build three simple scenarios

You don’t need a complicated forecast to make better decisions. Start with three scenarios.

Best case: Costs stay about the same.

Middle case: Costs rise moderately.

Hard case: Costs rise sharply, products are delayed, or suppliers change terms.

For each scenario, ask:

• Would we need to adjust prices?
• Would we reduce or delay orders?
• Would we need more cash on hand?
• Would we change our product mix?
• Would we need to talk with lenders or financing partners?
• What would we tell customers?

Running the numbers ahead of time gives you a clearer idea of which decisions might become necessary.

Protect cash flow early

Tariff uncertainty often becomes a cash flow problem before anything else. Higher costs can tie up more money in inventory, delayed shipments can push back sales, and customers may take longer to buy if prices rise.

A rolling cash flow forecast can help you see what’s coming before it becomes urgent.

Start with the basics:

• Review your current cash position.
• Look at upcoming payables and receivables.
• Separate essential purchases from nonessential purchases.
• Follow up on unpaid invoices.
• Avoid over-ordering without a clear plan.
• Review supplier payment terms.
• Talk to your lender before cash gets tight.

For businesses that import merchandise, Manuel also recommends considering when customs duties must be paid.

Instead of focusing only on how much a shipment will cost, think about when that money will leave your business.

That distinction matters because there may be options that help you manage the timing of those payments.

Talk to suppliers before you’re surprised

Your suppliers may not have perfect answers either. But early conversations can still help.

Ask them:

• Are prices expected to change?
• How long are current prices valid?
• Where are the products manufactured?
• Are shipping timelines changing?
• Can orders be split or timed differently?
• Are there alternate products or production locations?
• Are smaller minimum orders or different payment terms available?

Manuel also points out that improving payment terms can sometimes be as valuable as negotiating a lower price.

During uncertain periods, strong supplier relationships matter. A supplier who understands your business may be more likely to provide advance notice, suggest alternatives, or help you plan around changing costs.

Consider operational workarounds

Sometimes the answer isn’t a new supplier. It may be a new process.

Depending on your business, you may want to explore:

• Using a U.S.-based warehouse or distributor.
• Diversifying suppliers.
• Exploring domestic or regional alternatives.
• Adjusting inventory levels.
• Changing your product mix.
• Ordering earlier for seasonal demand.
• Negotiating better supplier payment terms.

When comparing these options, look beyond unit price. Consider total landed cost, lead times, minimum orders, freight, storage costs, quality, and cash flow.

One option that deserves a closer look is a U.S. Customs bonded warehouse.

How can a bonded warehouse help with tariff uncertainty?

A U.S. Customs bonded warehouse is a secured facility where eligible imported merchandise can be stored without immediately paying customs duties.

Under the applicable customs rules, duties are generally paid when the merchandise is withdrawn from the warehouse and entered into U.S. commerce.

This can give importers more control over when they pay those duties.

Manuel explains the distinction clearly:

“A bonded warehouse is primarily a cash-flow tool, not a way to eliminate tariffs.”

Consider a simple hypothetical example.

A business imports $40,000 worth of merchandise subject to a 10% duty. If all the goods are entered into U.S. commerce at once, that represents $4,000 in duties.

With an eligible shipment held in a bonded warehouse, the business may be able to withdraw smaller portions as inventory is needed. If it initially withdraws one-quarter of the shipment, the duties on that portion would be approximately $1,000, assuming the same valuation and duty rate.

The remaining duties would generally be deferred until the rest of the merchandise is withdrawn for U.S. consumption.

That could help the business preserve working capital instead of paying duties on the entire shipment upfront.

But there are important considerations. A bonded warehouse isn’t the same as an ordinary U.S. storage facility, and it doesn’t automatically eliminate tariffs. Duties generally apply when merchandise enters U.S. commerce, typically using the applicable rates at withdrawal, subject to customs rules.

Businesses also need to account for storage, handling, compliance, and other warehouse-related expenses.

Before pursuing this option, work with a customs broker or qualified trade professional to determine whether the arrangement makes financial sense for your products and business.

For more information, review U.S. Customs and Border Protection’s explanation of bonded warehouses.

Be careful with pricing

When costs rise, pricing gets uncomfortable fast. Some businesses wait too long to raise prices and end up weakening their margins. Others raise prices quickly without explaining the change to customers.

Neither approach is ideal.

Before making a pricing decision, look at:

• Your gross margin by product or service.
• Which products are most affected.
• Whether cost increases are temporary or likely to continue.
• How sensitive customers are to price changes.
• Whether you can adjust packaging, bundles, minimum orders, or delivery fees.
• How competitors may respond.

Remember that raising prices isn’t your only option. Adjusting order quantities, negotiating better supplier terms, or changing inventory practices may help reduce pressure.

When you do need to raise prices, communicate clearly. Customers may not need every detail, but they’ll appreciate understanding why changes are happening.

Remember that not every trade issue is the same

Some global business concerns are tariff questions. Others involve import rules, export controls, sanctions, licensing, documentation, or country-specific requirements.

The International Trade Administration explains that businesses involved in international trade need to understand the legal responsibilities governing imports and exports, including requirements that vary by product and market.

That’s especially important if you’re exploring new international markets or dealing with countries where trade rules are more complex.

Before changing suppliers, entering a new market, or making assumptions about tariffs, get qualified guidance.

You’re not the only one dealing with this

If tariff uncertainty feels overwhelming, you’re not alone. Many small business owners are asking similar questions:

• Can I afford this shipment?
• Should I raise prices?
• Will customers understand?
• Should I look for another supplier?
• Would a bonded warehouse help my cash flow?
• What happens if costs change again?

These are real business decisions that affect customers, employees, and long-term planning.

RISBDC advisors can help business owners think through financial planning, strategic decisions, market research, financing, and international trade opportunities.

If you’re weighing different options, an outside perspective can help you compare the costs, risks, and potential benefits before committing your resources.

When to ask for help

Consider reaching out for support if:

• Your margins are shrinking.
• Supplier prices keep changing.
• Cash flow feels tight.
• You’re considering a major inventory purchase.
• You’re unsure whether to raise prices.
• You’re exploring new suppliers or markets.
• You want to evaluate whether a bonded warehouse could work for your business.
• You need help reviewing financing options.

The earlier you ask for help, the more options you usually have.

Plan for flexibility, not perfection

No business can predict every tariff change or supply chain disruption.

But you can understand your numbers, build scenarios, protect cash flow, and explore alternatives before decisions become urgent.

As Manuel advises, start with four questions:

“What is my actual tariff exposure? What will it do to my landed cost? What will it do to my cash flow? What alternatives do I have?”

For some businesses, the answer may be better payment terms or smaller orders. For others, it may be a different supplier, domestic sourcing, or a bonded warehouse that helps manage when duties are paid.

The right approach depends on your products, financial position, and long-term business goals.

RISBDC offers no-cost, confidential, one-on-one business counseling to help Rhode Island entrepreneurs navigate uncertainty, evaluate options, and make informed decisions.

Request a meeting with an RISBDC advisor

Call us at (401) 874-7232
Learn more at risbdc.org