Negotiating With Customer on Duties & Tariffs

9 snips

May 28, 2025

Catherine Reed, an international marketing consultant based in Vienna and a lecturer on business, joins to share her expertise on negotiating import duties and tariffs. She highlights the importance of transparent communication and building strong partnerships with distributors. They discuss innovative strategies like creating a 'Tariff Impact' spreadsheet and leveraging cooperative planning to turn challenges into opportunities. The conversation also explores flexibility in pricing agreements amid market volatility and the significance of scenario planning for long-term success.

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INSIGHT

Import Duties Typically Paid by Importer

Import duties usually fall on the importer depending on the chosen Incoterm and agreement.
Building a full supply chain price map is essential to understand who pays what and stay competitive.

ADVICE

Negotiating Tariffs as Partners

Know your tariff impact numbers well before discussions with customers or distributors.
Approach tariff cost negotiations as a shared challenge to maintain strong, fair partnerships.

ADVICE

Flexible Pricing and Supportive Strategies

Give customers or importers proper notice and consider inventory and market conditions for price increases.
Use flexible pricing clauses and support like extended payment terms and marketing to soften tariff impacts.

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In this episode of the International Trade Resource Podcast, host Kim Kirkendall chats with international marketing consultant Kathryn Read, dialing in from Vienna to unpack the art and science of negotiating import duties and tariffs. They kick off by discussing who traditionally bears the cost of import duties under common Incoterms and why building a comprehensive “price map” with your importer is critical to staying competitive.

As the conversation unfolds, Kim and Catherine dive deep into the tactics for transparent, partnership-style conversations with your distributor. They also explore effective maneuvers for short-term volatility —think pre-tariff shipments and tiered notice periods—alongside more strategic long term moves like nearshoring and shifting supply chains.

Looking beyond the immediate scramble, the episode lays out a framework for robust scenario planning: defining trigger points, modeling P&L impact and setting up annual HS-code and COO reviews to uncover savings. Catherine shares how co-planning with distributors and suppliers by leveraging payment terms, offering marketing support, developing joint inventory strategies—creates a true “everyone’s in the same boat” mindset that can turn a tariff headache into an opportunity for stronger alliances.

Key Takeaways:

Map Your Costs: Build a live, end-to-end “Tariff Impact” spreadsheet to know exactly who pays what at every stage.
Negotiate as Partners: Use transparent, shared-challenge language and flexible pricing clauses to keep customers and distributors on your side.
Plan for All Scenarios: Define tariff “kill points” (e.g., 20%, 50%, 80%) and assign clear responsibilities for mild, moderate, and severe increases.
Balance Short- and Long-Term Moves: Maintain a toolkit of quick levers and strategic shifts to stay agile.

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