When it comes to navigating tariffs and their business impact, company size can make a significant difference—but being proactive and informed can help level the playing field.
Exemptions Apply to Products, Not Company Size
Let’s start with a common misconception: that exemptions from tariffs apply differently to large versus small companies. In reality, exemptions typically apply at the product or industry level, not by business size. If, for example, cell phones are exempted from a specific tariff, that exemption would apply whether you’re Apple or a much smaller electronics company. However, that’s where the parity often ends.
Bigger Companies, Bigger Resources
Larger companies are usually better positioned to withstand tariffs—and to adapt to them. They often have entire teams dedicated to structuring operations in a way that reduces tariff exposure. Many are well-versed in the complex processes involved in applying for exclusions, something that exists but is often overlooked by smaller businesses. It’s not that smaller companies can’t apply for exclusions—it’s that they may not even be aware such opportunities exist.
Stockpiling & Supplier Flexibility: An Advantage of Scale
The ability to prepare in advance of a tariff announcement is another area where scale matters. Larger companies tend to have the capital and foresight to stockpile goods or pivot to alternative suppliers and markets to mitigate impact. Smaller companies, by contrast, often have more limited resources and flexibility.
Pricing Agility & the Sales Function Gap
This advantage extends to pricing strategies. Larger organizations typically have more sophisticated sales operations that can quickly adjust to pass added costs from tariffs down to the consumer. Smaller companies are often slower to react. Reflecting on the early days of COVID-19, many small and mid-sized companies struggled to adapt to supply shocks, taking months or even years to reflect increased costs in their pricing—leading to squeezed margins.
No Matter the Size: Proactive Steps All Businesses Can Take
That said, regardless of company size, there are concrete steps businesses can take to better prepare for tariffs and minimize their impact. Supply chain mapping and risk management are key, as is developing relationships with alternative suppliers—including domestic options. Joining industry groups can also provide valuable insight and allow for collaboration, helping businesses stay ahead of regulatory changes and tariff developments.
Final Thoughts: Strategic Awareness Is the Great Equalizer
In the end, while business size offers certain advantages, strategic planning, awareness, and agility are tools that any company can—and should—leverage.
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This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
