US Tariff Calculator
Model how the latest US tariff changes affect your business profitability and develop optimal pricing strategies using price elasticity of demand
Model how the latest US tariff changes affect your business profitability and develop optimal pricing strategies using price elasticity of demand
Note: The tariff cost shown in each scenario may vary because it's calculated as a percentage of the customs value, which changes based on order volume in different scenarios.
This scenario shows the direct impact of increased tariffs without any pricing adjustment. Revenue remains unchanged, but costs increase due to tariffs, resulting in reduced profitability.
When to use this scenario: Use this as your baseline to understand the worst-case impact if you completely absorb all tariff costs. This is often necessary for highly competitive markets or when facing intense price competition.
| P&L Item | Pre-Tariff | Post-Tariff | Change |
|---|---|---|---|
| Revenue | $7,000,000 | $7,000,000 | $0 (0%) |
| Dutiable Value | $2,800,000 | $2,800,000 | $0 (0%) |
| Other COGS | $350,000 | $350,000 | $0 (0%) |
| Increased Tariff Costs | $0 | $280,000 | +$280,000 |
| Total COGS | $3,150,000 | $3,430,000 | +$280,000 (+8.9%) |
| Gross Profit | $3,850,000 | $3,570,000 | -$280,000 (-7.3%) |
| Sales Expenses | $1,400,000 | $1,400,000 | $0 (0%) |
| Fixed Expenses | $1,750,000 | $1,750,000 | $0 (0%) |
| Total Operating Expenses | $3,150,000 | $3,150,000 | $0 (0%) |
| Operating Income | $700,000 | $420,000 | -$280,000 (-40.0%) |
| Other Income/Expenses | -$50,000 | -$50,000 | $0 (0%) |
| Net Income | $650,000 | $370,000 | -$280,000 (-43.1%) |
| Profit Margin | 9.3% | 5.3% | -4.0pts |
| P&L Item | Pre-Tariff | Post-Tariff | Change |
|---|
| P&L Item | Pre-Tariff | Post-Tariff | Change |
|---|
With your current price elasticity of -1.5, here's how different price increases would affect your business:
| Price Increase | Volume Impact | Revenue Impact | Net Income Impact |
|---|---|---|---|
| 0% (No Change) | 0% | $0 (0%) | -$280,000 (-43.1%) |
| 2% | -3.0% | -$70,000 (-1.0%) | -$145,000 (-22.3%) |
| 3.8% (Break-Even) | -5.7% | -$133,000 (-1.9%) | $0 (0%) |
| 5% (Your Selection) | -7.5% | -$175,000 (-2.5%) | +$18,000 (+2.8%) |
| 10% | -15.0% | -$350,000 (-5.0%) | -$86,000 (-13.2%) |
Key Insight: For products with elasticity of -1.5, the optimal price increase is around 4-5%. This maximizes profitability while minimizing customer loss.
This chart shows projected net income at different price increase levels given your elasticity of -1.5. The peak around 4-5% represents your optimal pricing point to maximize profitability.
US tariffs are applied based on the Harmonized Tariff Schedule (HTS), with rates varying by product classification and country of origin. Key factors that affect your duty rates include:
The 10-digit code that determines your product's tariff rate. Proper classification is critical as errors can lead to penalties and unexpected costs.
Where your products were manufactured determines eligibility for trade agreements and preference programs that may reduce or eliminate duties.
Additional duties on Chinese-origin goods, ranging from 7.5% to 25%. These are applied on top of regular duty rates.
The dutiable value includes product cost, international freight, and insurance. Proper valuation strategies can impact your duty liability.
Understanding your products' price elasticity of demand is critical for developing effective tariff response strategies:
Strategy: Pass through most or all of the tariff costs via price increases
Examples: Premium/luxury products, branded goods, necessities
Rationale: Demand won't decrease significantly, preserving margins
Strategy: Pass through 40-60% of the tariff costs, absorb the rest
Examples: Mid-market consumer goods, moderately differentiated products
Rationale: Balances margin protection with volume preservation
Strategy: Minimal price increases, focus on cost reduction and supplier negotiations
Examples: Commodity products, highly competitive categories
Rationale: Maintains volume which is critical for these products
Strategy: Differentiated pricing based on each product's elasticity
Examples: Companies with diverse product lines
Rationale: Optimize pricing individually for each product category
