Tariffs have long been a part of global trade, but in recent years, they’ve become more unpredictable, and more impactful, especially for the wholesale distribution industry. Trade disputes, shifting political priorities, and economic volatility have pushed tariffs into the spotlight as a key factor in cost structures, supply chain planning, and growth strategies.
For B2B distributors, reacting after the fact is no longer an option. Navigating tariffs must become a core capability built into sourcing decisions, pricing strategies, customer relationships, and financing models.
In this article, we’ll look at how wholesalers and distributors are managing the rising pressure of tariffs and share key strategies to help you remain resilient and well-positioned for the future.
Understanding the tariff impact on B2B wholesale distribution
Tariffs aren't just an abstract policy lever. They are a direct cost that affects everything from sourcing and procurement, to pricing and customer relationships. This means that even modest changes to tariff rates can impact a company’s financials, requiring reassessment of suppliers, logistics routes, and pricing structures.
In theory, tariffs are meant to encourage domestic production and reduce reliance on foreign imports, and some products benefit from this. But in practice, tariffs typically introduce new layers of complexity, especially for B2B sellers who depend on global sourcing.
This complexity now intersects with another challenge — financial pressure on buyers. As tariffs raise landed costs, many buyers are facing tighter cash positions and irregular revenue streams. For distributors, this means rethinking not just where products come from, but also how purchasing is financed and fulfilled.
Recent developments shaping the tariff landscape
U.S. and China tensions, presidential orders, and inflation control measures have all contributed to the current tariff landscape, one that’s marked by uncertainty and surprise. From industrial components to finished goods, tariffs are touching nearly every category in wholesale distribution.
The unpredictability of tariffs complicates long-term planning. What’s imposed today could be lifted or intensified tomorrow. This creates a dual challenge of operational agility and financial resilience.
The real-world impact on B2B operations
The most immediate impact of tariffs is on the landed cost of goods. A 10 to 25% tariff can upend pricing models, compress margins, and put pressure on customer relationships.
Beyond cost, tariffs inject volatility into inventory planning and supplier negotiations. Businesses optimized for just-in-time delivery may suddenly find themselves needing to stockpile, reclassify products, or renegotiate supplier contracts.
There’s also a financial impact for B2B buyers. Increased tariffs can tighten buyer liquidity, delay purchasing decisions, or force customers to defer orders unless distributors provide flexible financing options.
This is where financial strategy becomes just as important as supply chain agility.
11 strategies for navigating tariffs in distribution
Below are 11 strategies that leading wholesale distributors are using to reduce tariff exposure and build long-term resilience, both operationally and financially.
1. Diversify supplier networks
In the past, many distributors developed deep but narrow sourcing relationships, often centered in one country or region. This made sense when global trade was relatively stable, but relying heavily on a single country or region for sourcing can now expose businesses to sudden tariff changes.
To reduce this risk, many distributors are expanding their supplier base. Expanding sourcing across regions with favorable trade agreements reduces dependency on single markets and provides greater leverage during renegotiations. This also helps mitigate risks from tariff spikes and political instability.
2. Stockpile inventory strategically
For goods likely to be impacted, proactive inventory building can buffer against future price hikes. This is most effective when combined with data-driven inventory planning and cash flow smoothing mechanisms to manage warehousing costs. The goal is to allow operations to continue smoothly, while navigating costs and adjusting sourcing strategies.
3. Implement new technologies and AI
Technology, particularly artificial intelligence, is playing a growing role in tariff strategy. Distributors are using AI-powered tools to model the impact of tariffs on their product mix, forecast demand more accurately, and identify cost-saving opportunities within their supply chains.
For example, predictive analytics can help businesses anticipate which SKUs are likely to be affected by upcoming policy changes, while machine learning algorithms can suggest more cost-effective sourcing alternatives or pricing adjustments in response to changing cost structures.
4. Adjust pricing strategies proactively
Rather than absorbing the full impact of tariffs, many businesses are implementing dynamic pricing models that adjust based on product costs, customer type, or competitive benchmarks.
Static pricing models leave little room to adjust when costs rise abruptly, but dynamic pricing frameworks allow businesses to respond more fluidly to changes in landed costs and demand levels.
Transparency is key here, so explaining to customers why prices are changing and tying those changes to clear economic drivers like tariffs can help preserve trust and loyalty during price increases. Offering predictable payment schedules through financing options can also help customers absorb pricing shifts without deferring purchases.
5. Engage in advocacy and industry collaboration
B2B wholesalers and distributors don’t have to navigate tariffs in isolation. Staying connected to industry groups such as the National Association of Wholesaler-Distributors (NAW) can provide resources and policy updates, and give businesses a stronger voice in shaping trade policy.
Participating in these networks can help businesses stay informed, align strategies with peers, and advocate collectively for fair and sustainable trade rules.
6. Renegotiate supplier contracts
Another way to offset tariff pressures is to renegotiate terms with existing suppliers. In some cases, distributors are able to secure cost-sharing arrangements, update delivery terms, or build in tariff adjustment clauses which allow pricing to shift more equitably when external conditions change.
Including tariff adjustment clauses in contracts can provide both parties with flexibility when external costs shift suddenly. These supplier conversations can be delicate, but they’re becoming a common part of supplier relationship management in this economic climate.
7. Use free trade agreements and duty drawback programs
Beyond contractual changes, many distributors are also exploring opportunities to reduce tariff exposure through programs like free trade agreements and duty drawback claims. Free trade agreements (FTAs) may reduce or eliminate tariffs on qualifying products, while duty drawback programs allow businesses to recover duties paid on imported goods that are subsequently exported.
These programs require careful documentation and planning, but they can provide meaningful savings for companies who are willing to invest the time and resources.
8. Restructure supply chains through nearshoring or onshoring
Some distributors are reevaluating their entire global supply chain. By moving production or sourcing closer to domestic markets, whether through nearshoring to neighboring countries or onshoring to the U.S., companies can reduce reliance on long international routes and lower their exposure to cross-border tariffs.
While this isn’t feasible for every product, moving operations closer to end markets can reduce exposure to tariffs, cut down on lead times, and improve supply chain visibility. Companies that are able to localize parts of their sourcing strategy are often better positioned to weather future global trade disruptions.
9. Optimize product classifications
Since tariffs are tied to Harmonized System (HS) codes, how a product is classified can significantly affect the duty rate. HS codes are administrated by the World Customs Organization (WCO), and WCO members use these codes as the basis for their tariff schedules and exports.
Conducting a product classification audit can help ensure that items are being properly categorized. They can also potentially reveal opportunities for reclassification into lower-tariff categories.
This strategy can lead to significant cost savings when executed properly, but it should always be approached in collaboration with trade compliance experts to ensure accuracy and legality.
10. Collaborate with logistics and freight partners
Shipping and freight providers can be valuable strategic partners in navigating tariffs. They can offer insight into duty mitigation strategies, customs planning, and more cost-efficient routing options. Working closely with logistics partners allows distributors to optimize their transportation plans in ways that minimize tariff exposure, while maintaining timely deliveries.
11. Offer third-party financing to customers
This is a growing area of strategic advantage. Offering B2B customers extended payment terms through third-party financing enables them to continue purchasing despite economic constraints.
Key Benefits:
- Cash flow protection: Helps buyers balance uneven cash flow and protect working capital
- Risk mitigation: You get guaranteed payment, while credit risk is transferred to the financing partner
- Competitive resilience: Keep financially stressed customers from switching to lower-cost competitors
- Strategic positioning: Build deeper buyer relationships and preserve pricing integrity without over-discounting
- Growth opportunities: Attract new buyers during downturns when traditional credit tightens
- Decreased bad debt: Lower write-offs when third-party financing handles collections
This approach also provides data-driven insights into shifting buyer behavior, allowing wholesalers to spot early signals of market change and proactively adjust.
“In times of economic uncertainty, especially when factors like tariffs impact cash flow and margins, our merchant partners turn to Credit Key as a strategic tool to maintain stability and drive growth. By offering flexible financing solutions, we empower businesses to manage unexpected costs while continuing to invest in their long-term success.”
Kruger Schaumkel, Vice President of Client Success at Credit Key
How leading distributors are responding to tariffs
Tariff strategy can sometimes feel abstract, but many of the most effective responses are already playing out in real-world businesses.
Several leading suppliers have taken proactive steps to adapt their operations and supply chains in ways that offer valuable lessons for the broader industry. These case studies illustrate the impact of tariffs, and also the diverse ways businesses can respond.
Grainger
Grainger, a Fortune 500 industrial supply company, has implemented strategies to mitigate the impact of tariffs on goods from China.
According to a report by Digital Commerce 360, Grainger's CEO, D.G. Macpherson stated, "We've been building up inventory in anticipation of these tariffs. This gives us the flexibility to maintain supply levels without significant cost increases in the short term."
Global Industrial
Global Industrial, a Fortune 1000 company, mentions that their company’s investment in AI-driven supply chain management will help offset increased costs, commenting “We’ve automated key parts of our supply chain, allowing us to respond more quickly to price changes and inventory disruptions”.
MSC Industrial
Passing increased costs onto customers has been a common strategy, but it needs to be done in a transparent and empathetic way. MSC Industrial is one of the largest industrial equipment distributors in the United States, and its CEO Erik Gershwind states that:
“We’ve implemented cost-plus pricing to ensure customers understand how tariffs are affecting the supply chain. Being upfront about these challenges helps build trust and maintain long-term relationships. We’re (also) building flexibility into our supply chain and pricing models to respond to future tariff adjustments. Scenario-based modeling allows us to forecast and prepare for a range of outcomes.”
These examples show that while tariffs pose real challenges for the wholesale distribution industry, they can also serve as a catalyst for innovation.
In summary
Tariffs are no longer a temporary obstacle. They’ve become the new reality for global commerce, especially for B2B distributors operating across borders.
If you’re feeling the strain of tariff-driven cost increases or policy uncertainty, the path forward begins with proactive planning, strategic sourcing, and flexible financing to develop stronger buyer relationships.
It’s important to take stock of your current exposure, evaluate which of these strategies align with your business model, and begin the process of operational realignment.
With the right tools, finance partners, and mindset, navigating tariffs can become a key part of building a stronger, more future-ready business.
Topics from this blog: Finance