Leader Briefing: Trump's New Tariff Threat

Don't panic. This is what your leadership team needs to know

Trump’s European tariffs are back in the headlines.

We covered the brand implications when the news broke Saturday. Now it’s Monday morning and your team needs answers.

Here’s a concise briefing for your leadership team on how to respond.

Context

The detail will move around, but the shape of it’s familiar. Trump has been talking about imposing new tariffs on imports into the US from a set of eight European countries.

But what does this mean for brand’s in affected company selling things like clothing, footwear and other consumer products.

If you ship real volume into the US from Europe, that’s not a politics story. It’s unit economics, cash, and planning risk landing on your desk.

This memo is the fact sheet that stops you panicking. Get these definitions straight and you can work out if you’re exposed to Trump’s announcements, and by how much.

The four inputs that decide your import bill

1 - Classification. This is your HS or HTS code. It decides the duty rate, and it often decides what extra paperwork and controls show up.

2 - Country of origin. Origin is where the product is considered made, not where it ships from. In some cases, changing where the last substantial step happens can legally change origin and change duty outcomes, but it has to be real processing and you need to be able to evidence it. For the majority of European based brands, the bulk of their products are made outside of the affected tariff zones - so this gives everyone reasons to be calm.

3 - Customs value. Duty is calculated on the customs value, not your retail price. If your intercompany setup bakes in a markup before goods hit customs, you can end up paying duty on value you never planned to be taxable.

4 - Route to market. How the goods enter a country changes both cost and admin. The classic trap is duty being assessed on a higher value when you ship direct to the consumer versus when you import in bulk at your cost into a local warehouse or 3PL.

Landed cost and margin

Landed cost is what you actually run the business on. It’s the supplier price plus freight, duties, tariffs, customs fees, and everything it takes to get the unit into a saleable place.

If duty and freight sit elsewhere in the P&L, your merch margin is lying to you. Finance might tolerate that classification, but buying and pricing decisions won’t.

A landed cost flow that holds up when policy swings looks like this.

• Start with the true unit cost tied to your incoterm.

• Allocate freight, insurance, clearance, and inbound handling down to unit level.

• Add duty and any import taxes driven by classification, origin, and customs value.

Then rerun margin from the landed number, by channel.

Gross margin % is net sales minus landed cost, divided by net sales.

Tariffs can move fast. We’ve already seen duty rates jump hard enough to turn a profitable buy into a margin hole while the stock is still on the water.

Data and identifiers

You can outsource customs brokerage. You can’t outsource product truth.

Rules are tightening in a lot of places, and that usually means more declarations, more scrutiny, and less tolerance for vague product info. If you don’t have consistent classification, origin, composition, and values at SKU level, you’ll feel it as delays, rework, and unpleasant surprises on the invoice.

This is where UPC and EAN stop being retail plumbing and start being ops control. Barcodes only help if they point to clean, complete product records, and in most brands data completeness slips through the cracks because nobody’s accountable.

The quick drill when the next headline lands

You don’t need a war room for every tariff threat. You need a repeatable check that tells you if you’re affected.

• Pull your next inbound and your top sellers, then confirm classification, origin, customs value, and route to market.

• Rebuild landed cost per SKU and rerun margin by channel using the new tariff assumptions.

• Decide fast on the few levers you can actually pull, purchase order timing, inventory placement, and pricing.

You don’t need to become a customs lawyer. You do need to stop being surprised by costs you could’ve modelled in an afternoon.