If you are confused by what the president Donald Trump’s prices Nasty for you, you are not alone.
While companies are faced with a new era of American protectionism, many are turn to consulting companies For strategies to adapt to the rapidly evolving regulatory landscape.
Business Insider spoke with the leaders of some of the best advisory companies in the world to find out what advice they give to their customers.
The first instinct of certain companies is to Pass the cost of tariffs on the consumer. In March, the association for the management of the supply chain interviewed 400 professionals in the supply chain and found that 65% of companies intended to do exactly this.
Several consultants, however, told Bi that coverage price increases are not always the best decision.
Consumers face higher prices at all levels, so unless the product is a fundamental necessity, trying to modify the cost will generally result in a reduction in demand, BI Bi told Bi. In the end, a company would be forced to reduce prices Move the stock, he said.
“Companies have more control than they think,” said Shannon Copeland, CEO of SIB Consulting in BI. As a specialist in cost reduction, SIB aims to help customers avoid paying too much in the areas they can control, so that when prices are increasing, they do not start from an ineffectiveness, said Copeland.
“The companies that are best are those that do not leave their expenses in automatic pilot,” he said. “Get an exposure to proactive prices and treat like any other business risk.”
He advised companies to audit supplier contracts, analyze the rate structures and assess recurring expenses for hidden vulnerabilities.
With prices restricting the maneuver of the supply chain, the subject quickly emerge that companies must think “Go to the market,” said World President of the Boston Council Group, Rich, less in Bi.
He said they should ask questions like: How do you understand your economy about your competitors? How do you watch what’s going on in real time on a store shelf or in an industrial supply chain? How do you think of prices for your business?
Cindy Levy, a senior partner of McKinsey, said that some companies could benefit from the revision of prices more often. “Instead of once a year, they can adapt every few months. It is really a question of managing costs through the value chain, especially when the price increase is not an option.”
Other The means of reducing costs include “modification of packaging or ingredients, adjusting promotion strategies or focusing on products that are less cost pressure,” she added.
Kristin Bohl, a PWC partner focused on customs and international trade, offered three major advice: create agile strategies, bring together good people and model your impact.
“You cannot make informed decisions on your strategic response to the prices unless you know the financial impact of these prices on your business,” she said. Options for companies that wanted to avoid increasing prices include delay tariff payments or even obtain a refundshe said.
In the short term, “consumers and businesses are likely to share the burden, with a larger part of computer science over time,” wrote researchers from the University of Pennsylvania on a dissertation on the economic impact of Trump prices.
In early April, Trump announced a 90 -day break on his “reciprocal prices”, which initially targeted approximately 185 countries. Since then, the administration has been negotiating with various business partners, including Canada, Mexico, Japan and China.
Trump announced an agreement with the United Kingdom this month, which includes “billions of dollars in increased access to the US export market”, in particular agricultural products, said Trump.
The United States and China, on the other hand, also concluded an agreement. The two countries have agreed to reduce tariffs by 115% while maintaining an additional 10% rate, according to a white house press release.
This means that the United States will remove the additional rates it imposed on China on April 8 and 9, but will maintain the tasks taken from China before April 2. China, on the other hand, will remove the reprisals prices it has announced since April 4 and suspend or remove the non-tariff countermeasures taken from the United States since April 2.
When it comes to preparing in the long term, Hencoski from KPMG said that companies must build a team of people from all their organization which can digest all impacts and develop an action plan.
Companies “also use this moment to review the longer term decisions around their footprint, their suppliers and even where to invest,” said Levy. The most intelligent of them “do not only react – they prepare for a future where disturbances are the norm.”
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