NextFin news, On Friday, September 19, 2025, businesses across the United States have been employing a strategy known as 'tariff hacking' to mitigate the impact of tariffs on consumer prices amid the ongoing trade war initiated during the Trump administration. This approach involves routing products through intermediary companies to reduce tariff expenses and avoid significant price hikes for consumers.
Tariff hacking is a business-to-business-to-consumer (B2B2C) model where a middleman company, acting as a merchant of record within the U.S., purchases products from overseas suppliers and pays tariffs based on the wholesale price rather than the retail price. This intermediary then ships the products directly to consumers on behalf of the retailer, effectively lowering the tariff burden and keeping prices more affordable.
James Mohs, associate professor of accounting, finance, and taxation at the University of New Haven, explained to Fast Company that this practice is not new but has gained prominence due to the current 'tariff tsunami' and global economic uncertainty. Mohs illustrated the concept with an example: a Chinese company facing a 50% tariff on goods imported into the U.S. might ship products to a subsidiary in Vietnam, where the tariff is only 10%, and then ship to the U.S. under the subsidiary's name, thereby saving 40% in tariffs.
Retailers and manufacturers are rethinking their supply chain strategies to adapt to these tariffs and avoid delays, disruptions, and inflated costs. The strategy has led to the emergence of companies specializing in logistics and tariff workaround solutions to meet growing demand.
However, experts caution that tariff hacking is a short-term solution. The U.S. government’s future stance on whether tariffs will be assessed based on the original country of origin or allow intermediaries to act as the point of entry remains uncertain. This uncertainty makes the long-term viability of tariff hacking unclear.
The tariffs, originally imposed during the Trump administration, have contributed to rising prices on imported goods, including staples like bananas and coffee, as reported by NPR on September 19, 2025. These tariffs act as a tax on imports, which ultimately raises costs for consumers at retail outlets.
Retailers' adoption of tariff hacking reflects efforts to shield consumers from the full impact of these tariffs amid persistent inflation and supply chain challenges. While it offers temporary relief, the strategy's sustainability depends on evolving trade policies and regulatory responses.
Sources: Fast Company (published September 19, 2025), NPR (published September 19, 2025), CNBC (published September 19, 2025).
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