Tariffs and Price – Justify Your Value
With the election (or re-election) of President Trump, there’s been a lot of talk of tariffs and the impact on the US Economy. More specifically, how they could impact businesses. First, let’s make sure we define the term tariff. A tariff is a tax imposed by one country on the goods or services imported from another country. I am not here to get into the reasons these are used. However, I do want to address how a business typically handles items like this (or any other form of tax).
A business will almost always pass this increased cost on to their consumer/customer/client. Yes, it is a burden, which is why it’s important that a business owner remains focused on justifying their price. The value provided to the end user will almost always justify the price that is charged. When the price paid exceeds the value, competition comes in and the price eventually adjusts. Said another way, this is the way that a capitalist economy handles these issues. It is not a linear adjustment, but it does eventually even out. Capitalism has a funny way of leveling the playing field of business.
As Warren Buffet famously said:
“Price is What Your Pay, Value is What You Get”
Here are some other items of interest:
- Here is the latest from David Barnitt @ Attract Capital
As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.
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