Highlighting Economic Impacts of Tariffs- How Schooley Mitchell Can Help

I’m noting that tariffs in 2018 led to higher raw material costs for manufacturers. By 2019, these tariffs were projected to cost the average US household about $831 annually, as estimated by the Federal Reserve Bank of New York.

How Tariffs Can Trigger Inflation—and How Schooley Mitchell Helps Businesses Stay Competitive

Tariffs have taken center stage in recent years as countries around the globe navigate shifting trade policies. These taxes on imported goods can ripple through supply chains, ultimately influencing prices and consumers’ purchasing power. In this article, we’ll explore the relationship between tariffs and inflation, provide key data points that illustrate this connection, and explain how Schooley Mitchell’s cost-reduction services can help businesses safeguard their bottom line.

The Tariff–Inflation Link

1. Tariffs as an Added Cost

When a government imposes tariffs, importers pay a higher cost for goods coming from abroad. These extra costs often pass through to downstream industries and, eventually, to consumers. According to a 2019 report by the Federal Reserve Bank of New York, tariffs introduced in 2018–2019 were estimated to cost the average U.S. household around $831 per year. This illustrates how even modest percentage increases on imported products can add up, amplifying inflationary pressures in the broader economy.

2. Reduced Competition

Tariffs can also stifle foreign competition in domestic markets. When foreign goods become more expensive due to tariffs, local producers may face less pressure to keep prices low. This decrease in competition can lead to higher domestic prices over time, contributing further to inflation.

3. The Supply Chain Effect

Even businesses that don’t import directly can be affected by tariffs. For example, if a company’s suppliers rely on imported components or raw materials, the cumulative effect of multiple tariff-driven price hikes can force it to raise its own prices. This “knock-on” effect across the supply chain adds to overall inflation.

Real-World Data Points

1. Tariffs on Steel and Aluminum (2018):
2. Impact on Business Sentiment:
3. Broader Economic Estimates:

How Your Business Can Mitigate Tariff-Driven Inflation

While no organization can directly control international trade policies, companies can manage the impact of tariffs by optimizing other parts of their cost structure. This is where Schooley Mitchell, North America’s largest independent cost-reduction consulting firm, comes into play.

1. Comprehensive Spend Analysis

• Uncover Hidden Expenses: Schooley Mitchell conducts a deep-dive review of your vendor contracts, invoices, and billing structures—often revealing fees, surcharges, or premium pricing you might not know exist.
• Benchmarking & Best Practices: Drawing on extensive industry data, Schooley Mitchell can show you how your expenses compare to similar businesses, identifying where you can secure better rates.

2. Strategic Vendor Negotiation & Management

• Negotiation Expertise: Schooley Mitchell’s consultants handle $360 million+ in documented savings for their clients each year (according to internal reporting). They use this collective experience and market knowledge to negotiate improved terms with vendors.
• Ongoing Oversight: After renegotiating contracts, Schooley Mitchell regularly audits invoices to ensure the agreed-upon rates remain in effect, catching any unauthorized increases or hidden charges before they add up.

3. Shipping & Logistics Optimization

• Analyzing Carrier Contracts: In an environment where tariffs could inflate shipping costs, Schooley Mitchell’s shipping experts can optimize your logistics. They analyze routes, carrier contracts, and service levels to identify the most cost-effective solutions.
• Multi-Carrier Strategies: When appropriate, shifting or diversifying your transportation modes can mitigate sudden tariff hikes that affect specific regions or product lines.

4. Tailored Cost Management

• Regular Audits: Given that markets evolve and vendors often introduce new fees, continuous monitoring is crucial. Schooley Mitchell schedules regular audits to confirm you’re still getting the best possible deals.
• Risk Assessment: If your supply chain heavily depends on tariff-affected goods, Schooley Mitchell can highlight vulnerabilities, helping you diversify suppliers or explore nearshoring options, reducing tariff exposure.

5. Performance-Based Model

• Contingency-Only Approach: Many consulting services charge upfront fees. Schooley Mitchell typically works on a contingency basis, meaning if they don’t save you money, you don’t pay a fee. This model aligns their incentives with your business goals and ensures no financial risk for your organization.

Why Now Is the Time to Act

In today’s volatile economic landscape—with ongoing tariff uncertainties and broader inflationary pressures—proactive cost management is critical. By optimizing telecom, merchant services, shipping, utilities, and other critical expense areas, your business can offset much of the strain imposed by tariffs.

Schooley Mitchell’s track record of identifying and implementing average cost savings of up to 28% for their clients underscores the potential impact on your bottom line. When every percentage point counts, these savings can mean the difference between thriving and merely surviving in an inflationary market.

Final Thoughts

Tariffs undeniably contribute to inflationary pressure by increasing the cost of imported goods and materials. While you can’t influence global trade policies, you can take control of how your organization adapts to these higher costs. Schooley Mitchell provides a proven pathway to uncover hidden expenses, negotiate better vendor terms, and continually safeguard your company against cost creep.

If you’re ready to see how Schooley Mitchell can help your organization weather tariff-induced price hikes and emerge more cost-efficient, reach out for a comprehensive spend analysis today.