All indications are that free trade has gone the way of the typewriter and the pay phone. What has long been a pillar of economic liberty and free-market capitalism has been degraded by protectionism, populism and isolationism. Neo-mercantilism is the flavor of the month.

In order to effectively respond to tariff increases, an import company must recognize it has four options: pass the tariff increases along to their customers, absorb the tariff (resulting in lower profits), renegotiate contracts with suppliers or switch suppliers.

The firm must conduct an internal audit of its operations to gauge efficiency, effectiveness, productivity, competitiveness and sustainability. A well-led and well-managed enterprise would want to do this anyway on a regular basis. Such a “health check-up” would include all units of a company’s operations: finance and accounting, sales and marketing, human resources, production, IT and customer service.

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