Pricing Agility in the Face of Tariffs: What 2025 Could Demand
Intro:
As inflation indicators begin to shift again, pricing is back in the spotlight. In a recent conversation, a CEO posed a sharp question about the 2018 tariff wave and its lack of impact on consumer prices — and whether 2025 could look different.
Here’s what we’re seeing now, and how pricing leaders should be thinking.
The Question:
“An interesting finding was that the first set (2018) of tariffs had zero impact on inflation — there was no pass-through to the consumer.”
And that was absolutely true. CPI hovered around 2% in both 2018 and 2019, despite a wave of tariff activity.
But this year may be different.
What’s Different in 2025
📊 According to recent reports, U.S. tariff collections are up 86% year-over-year. Someone is paying — and that introduces a supply shock.
How that shock is absorbed depends on many factors, including the presence (or absence) of pricing maturity.
Where the Pressure Is Landing:
a) Overseas vendors – Some absorb the cost; others re-route goods through Thailand or relocate production to Vietnam.
b) Importers and middlemen – Restructure supply chains or switch vendors.
c) Large buyers – Some respond by cutting internal costs or laying off employees.
d) Pricing-immature firms – Absorb rising costs and see margins erode.
e) Pricing-mature firms – Pass through price increases surgically, protecting volume and brand trust.
What Real Pricing Maturity Looks Like
Pricing isn’t just a number. It is:
Segmentation
Elasticity
Value clarity
Sales enablement
Negotiation skill
And focused execution
In reality, you can’t model everything. So the challenge is to focus on the pricing moves that matter most.
That’s what we help clients do at Chapel Hill Advisors — especially when timing, pressure, and uncertainty collide.
The Bottom Line:
If inflation surges in 2025 — while others are still assuming it won’t — pricing agility will matter. Reach out if you want a thought partner in defining your strategy.
Note: Blog content reflects general principles and observations. Specific recommendations for any business require a thorough review of its unique context, market conditions, and internal data.