How Understanding Your COGS Can Potentially Shield Your Business from Tariff Volatility

In today’s global marketplace, tariff volatility is an unpredictable and often unavoidable risk for business owners, especially those with international supply chains. As trade policies shift and international relations evolve, tariff rates can swing dramatically—impacting everything from raw materials to finished goods. But while companies cannot  control tariffs, they can prepare for them.

One of the most strategic defenses a business owner has against tariff fluctuations is a clear and thorough understanding of their Cost of Goods Sold (COGS).

Why COGS Matters in Tariff Planning

COGS includes all the direct costs associated with the production of goods sold by a particular business —such as materials, labor, and manufacturing expenses. When businesses know exactly what goes into each product and how much it costs, they can make smarter decisions regarding:

• Supplier sourcing: Identifying alternative suppliers in tariff-neutral countries.

• Inventory strategy: Stockpiling raw materials or goods ahead of expected tariff increases.

• Pricing models: Adjusting pricing structures to pass some or all tariff costs to customers—without eroding market competitiveness.

• Contractual protections: Reworking vendor or customer contracts to include tariff escalation clauses.

Proactive Risk Management

The businesses that fare best in turbulent tariff environments are those that are proactive—not reactive.

Whether you are a manufacturer, importer, or reseller, now is the time to review your COGS, re-evaluate supplier contracts, and assess your exposure to trade risks.

Legal Considerations

At Oberman Law Firm, we work closely with our business clients to review and revise contracts that may be vulnerable to tariff-related cost spikes. We help businesses navigate issues such as:

• Force majeure and price adjustment clauses

• Long-term supplier agreements

• Customs classifications and duty drawbacks

• Compliance with international trade regulations

About Us Oberman Law Firm represents clients in a wide range of practice areas, including private equity, M&A, healthcare, corporate transactions, intellectual property, data privacy and security, regulatory compliance and governance, cross-border transactions, labor and employment, construction law, litigation, private clients’ services, corporate restructuring, and white-collar and governmental disputes.

As a firm, we offer the highest quality legal advice coupled with extraordinary and tailored service to deliver exceptional results to our clients. Our philosophy is to invest deeply in the brightest legal talent and build dynamic teams that operate at the pinnacle of respective practice areas. We believe in empowering our attorneys, encouraging entrepreneurialism, operating ethically and with integrity, and collaborating to bring the very best to every client engagement. These principles have guided us in building extraordinary and successful long-term partnerships with our clients.