Six pricing strategies to consider in today’s tariff landscape

With the world currently in a tariff crisis, many leaders in Europe and beyond are wondering how to best address the changing market dynamics and limit the impact on their bottom-line. Valcon partners Anders Gantzhorn and Danilo Zatta share six ways how smart pricing strategies can help businesses successfully navigate the tariff landscape.

1. Understand the impact of tariffs on your cost structure

The first and most critical step is to quantify how tariffs will influence your overall costs. Identify which products or components are directly affected and determine the scale of additional expenses introduced by these tariffs.

By doing a detailed cost-impact analysis, you’ll be equipped to make data-driven decisions about pricing adjustments. Understanding your exposure also enables more precise margin preservation across product categories, preventing overcorrection or under-pricing.

2. Adjust pricing strategically, not uniformly

A common pitfall is to apply a uniform price increase across the board. But this approach can lead to reduced competitiveness and customer churn, especially in price-sensitive segments. Instead, it’s important to segment your offerings based on demand elasticity. For items with low price sensitivity (inelastic demand), a more significant price adjustment might be sustainable.

For products with high price sensitivity, a smaller, more nuanced increase – or even no change – might be necessary to retain volume. Price leaders in the market typically act first, while followers react to competitive signals. Strategic pricing gives you an advantage over both.

3. Justify increases through value-added offerings

Raising prices can risk customer dissatisfaction – unless there’s a clear, perceived benefit. That’s where value-added services come in. Bundle your core product with extras like extended warranties, premium support, training, or fast-track delivery options. These enhancements shift the conversation away from cost alone and toward overall value, helping to retain customer loyalty even when prices rise.

A smart value proposition makes the adjustment more palatable and positions your brand as a partner rather than just a supplier.

4. Track competitive moves and market reactions

In a tariff-influenced market, no pricing decision exists in a vacuum. Your competitors are facing similar cost pressures and will be adjusting their strategies as well. Stay vigilant – monitor their pricing changes, promotional tactics and value propositions. Adapt your response accordingly to make sure that you’re aligned with market expectations.

Being overly aggressive or too conservative without contextual insight can result in decreasing sales and lost market share. Market intelligence is not a luxury – it’s a necessity.

5. Preserve price integrity through alternative levers

Discounting should not be your first response to tariff-related pressures. Instead, you should look at alternative levers that protect your pricing integrity. Think about offering substitute products with different sourcing origins or revising payment terms to ease customer cash flow. You could consider providing more flexible delivery timelines or re-evaluating supply chain routes.

Renegotiating contracts could also reveal opportunities to cut costs upstream without adjusting end-customer prices. These actions reinforce your value without undermining long-term brand positioning.

6. Act quickly and smartly on price adjustments

Timing is everything. Delayed responses to tariff changes can erode margins and lead to lost trust in the market. Leverage advanced analytics and AI-powered pricing tools to quickly process relevant data, such as tariff rates, supply chain inputs, competitor moves and customer behaviour, and use these to guide your pricing decisions.

Fast action based on reliable insights will allow your business to stay agile and proactive, instead of being reactive and feeling under pressure.

Conclusion

In an era where tariffs are shaping global business decisions, companies have to adopt a disciplined, flexible and informed approach to pricing. By understanding costs, tailoring strategies, adding value, observing the market, maintaining pricing discipline and acting swiftly, organisations can not only mitigate the impact of tariffs but also use them to help get a competitive advantage.