Why Strategic Planning Can’t Wait for Certainty

Authored by David Zaiken

This has been the year of “wait and see” for tax professionals, but for companies that import goods into the U.S., waiting may be the riskiest move of all.

Between rising tariffs, the upcoming possibility of major tax reform, and the ripple effects across state and local tax rules, businesses face a complex web of variables that could seriously impact cost structures, supply chains and profitability. And while it’s tempting to wait for final numbers or legislative clarity, many of the decisions that will protect margins need to be made before the dust settles. Both tax changes and tariffs are destined to be finalized by the middle of July and this highlights the current need for planning.

Tariff Pressure Is Already Real

Even before the July 9, 2025, expiration of the current 90-day tariff pause, many businesses are already seeing the cost impact. Tariffs on Chinese imports may jump from 30% to as high as 145%, effectively cutting off trade in some categories unless a new deal sticks. Steel and aluminum tariffs have already doubled via executive order. The impact is already noted in public financial results for companies like Dollar Tree, which announced the tariff damage: $70 million in tariff-related costs in a single quarter.

This isn’t a policy debate anymore. It’s a financial one.

Monthly tariff revenues to the U.S. government have more than doubled since the beginning of the year. It’s a sign that higher rates are being enforced and collected now. The recent announcement of a pending deal with China sounds promising, but the fine print is vague and the enforcement timeline remains uncertain. Businesses should be planning for what happens if the deal doesn’t hold — or even if it does, but with strings attached.

A Proactive Tariff Strategy is No Longer Optional

Rather than bracing for impact, companies should be working now to model different tariff exposure scenarios and strategies so as to explore options for reducing risk and financial costs. This is now the time to engage in this type of strategic thinking. Possible strategies include:

• Reevaluating supply chain roles. Who is the importer of record? Could your suppliers take on that role, shifting the duty burden?
• Renegotiating pricing structures. Are your contracts flexible enough to adjust pricing in response to cost changes? Have those discussions started with key customers?
• Revisiting tariff classifications. Are you confident that the correct codes are being used? Misclassification can result in overpayment or compliance issues.
• Exploring country-of-origin alternatives. Even a partial shift in manufacturing location may reduce tariff exposure. Start those conversations before everyone else does.
• Movement of assembly or other production. Move it to the U.S. to reduce the value of goods imported.
• Explore the use of more restrictive Free Trade Zones and the First Sale Rule.
• Impact of transfer pricing. Look at how it’s impacting related party sale or supply.
• Use of near-shoring. This would be to achieve a delay in tariffs until goods enter the U.S.

These strategies are not one-size-fits-all, and many are interdependent with tax and transfer pricing considerations. That’s why integrated planning is key, especially as federal and state tax rules evolve in tandem with trade policy.

Waiting for Congress on Tax Strategy

Congress is actively negotiating sweeping tax reform, with the House and Senate considering passing their versions of the so-called “One Big Beautiful Bill Act.” While final provisions are still in flux, most agree major changes are coming by 2026 when much of the Tax Cuts and Jobs Act expires.

Among the most business-critical provisions being debated:

• 100% first-year depreciation for qualified investments
• Immediate expensing of R&D
• A higher limit on interest expense deductions (based on EBITDA)
• Revisions or expiration of the Qualified Business Income (QBI) deduction
• Changes to international tax treatment for foreign-owned entities
• A broad rollback of energy credits

Even without a signed bill, it’s clear that deductions may be temporarily generous, but the broader tax environment is becoming less predictable — and potentially less favorable — for multinationals and pass-throughs. Many of these favorable changes can be combined with tariff strategies to achieve greater cost efficiency

For businesses already considering supply chain shifts to mitigate tariff risk, tax reform could tip the scales. Investing in domestic manufacturing, for example, may now come with bonus depreciation and new state-level incentives. Modeling the combined tariff and tax impacts of supply chain changes may reveal opportunities to capture upside or avoid costly surprises.

Don’t Overlook State and Local Taxes

Tariffs don’t only affect federal balance sheets. They can impact sales and use tax liabilities, too, depending on how they’re invoiced and who pays them.

If you’re the importer and pay tariffs directly to Customs, they’re generally not subject to sales tax. But if the supplier builds tariff costs into the price or invoices them as a line item, sales tax may apply in many states, including California, New Jersey and Washington. Each of these states has issued specific guidance confirming this.

Moreover, if your tariff strategy includes onshoring production or opening new domestic facilities, you’ll also need to assess:

• Property tax implications
• Nexus rules and filing requirements in multiple jurisdictions
• State-specific incentives and exemptions
• The right legal entity type for your structure

Some states offer generous tax credits for manufacturing jobs and capital investment. Others impose franchise taxes that can negate the benefit if not properly planned for. The SALT impact of tariff-driven business decisions can’t be an afterthought — it must be built into your model from day one.

Don’t Wait to Plan

The worst position to be in this fall is having made no moves, and facing both higher tariffs and an altered tax landscape with no flexibility. Businesses that act now can still:

• Improve classification and compliance to reduce unnecessary duties
• Model out pricing, sourcing and tax impact scenarios
• Adjust transfer pricing agreements to account for customs risk
• Identify state tax opportunities before finalizing new locations
• Hedge against future volatility with flexible contract structures

No one has perfect clarity. But we have enough information to act. And for U.S. importers, strategic inaction is a decision — and often the most expensive one.