Surviving Tariffs: A Playbook for CPG Startups
A strange thing happens in times of uncertainty: People confuse motion with progress, and reaction with strategy.
On April 2nd, Donald Trump followed through on his campaign promise and announced sweeping new tariffs. No one knows exactly what will happen next; including, I suspect, Donald Trump. The news moved markets and sparked panic in boardrooms, especially for early-stage consumer startups staring down the barrel of already-thin margins and long supply chains.
We’ve been here before. Not exactly here, but close enough. Trade wars. Covid. Port congestion. Labor shortages. Factory fires. Each one was different, but the story they told was the same: the world is more interconnected than you think, and more fragile than you expect.
Startups feel these tremors more than incumbents. That’s not bad luck, it’s structural. The bigger players have pricing power. They buy in bulk. They sit on margin buffers. They have lawyers and lobbyists and line-item leverage.
You have hustle, optimism, and a supplier you found through Alibaba. We’ve seen what happens when ambition collides with logistics. Finding a new supplier, especially one outside of tariff-affected zones, isn’t like switching email providers. It takes time. Six to eight months at best. Sometimes a year. And that’s if everything goes right.
So here’s the paradox: The worst time to make a big decision is often when it feels most urgent.
The temptation now is to react; to raise prices preemptively, to rush into new supply chain deals, to overcorrect. But the truth is, nobody knows how these tariffs will play out. They might hit your category. They might get negotiated away. They might be delayed, doubled, or dead-on-arrival.
That doesn’t mean you do nothing. It means you do the right things, slowly and deliberately.
Here’s what that looks like:
1. Diversify, not just react.
This isn’t about pulling all your production to the U.S. overnight. It’s about not being caught off guard. China +1 isn’t new advice, but it’s more relevant than ever. A supplier in India or Mexico gives you options, and options are critical in this environment. There’s no guarantee that different countries will fare any better than China, but it’s always better to have more options.
2. Know what you don’t know.
Most founders don’t have full visibility into their supply chain. They know their factory, maybe their factory’s factory. But tariff impacts can hide upstream, where your packaging is made, where your raw materials are sourced. Now is a good time to go deeper, ask more questions, and truly understand your dependencies.
3. Tariff-proof where you can.
Sometimes, minor changes to your product or packaging can reclassify it into a lower tariff bracket. It’s called tariff engineering. It’s boring and technical and it can save your business. Ask your freight forwarder or customs broker.
4. Buy time, not headlines.
Don’t announce a pricing change before you need to. Customers forget inflation, but they remember price hikes. If you do need to adjust, be transparent and test in small markets first. Flexibility beats bravado.
5. Build your “boring muscle.”
The best consumer products founders I know are obsessive with operations. They know lead times like song lyrics. They understand landed cost per unit like it’s their P&L’s heartbeat. Tariffs are a symptom: the root issue is how well you know your business when the world turns upside down.
6. Remember: uncertainty is not new.
It just feels new. But every few years, there’s an “unprecedented” shock to the system. The companies that survive (and sometimes thrive) aren’t the ones with the best PR or the flashiest growth deck. They’re the ones who did the boring work when no one was watching. While everyone was focused on figuring out how stimulus checks would impact the stock market and PPP loans, OLIPOP stayed focused on optimizing their food science work and co-packer relationships: less sexy but necessary work.
The goal isn’t to avoid volatility. It’s to build a business that can bend without breaking.
Startups are fragile. But they’re also fast. They can adapt in weeks while incumbents are stuck in committees. That’s your edge. Use it wisely.
Tariffs might be the story now. Next quarter, it’ll be something else. You don’t get to choose the chaos, only how you prepare for it.