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Landed cost and logistics
Tariff impact calculator: what a new tariff costs you
Enter your yearly volume, the supplier price, your current duty and the new tariff rate. You get the added yearly cost and the price cut that would offset it.
A tariff adds its rate to the duty you already pay. At the default numbers a 25 percent tariff adds USD 40,000 a year, and the supplier would need to cut the price by 19.4% to hold your cost flat.
Written by Procurement VMS Editorial Team · Reviewed by Michael, Procurement Advisor Expert · Updated
Your numbers
The boxes start with an example so you can see how it works. Replace them with your own figures.
Your result
The tariff adds USD 40,000 a year, or USD 2.00 a unit. To keep your cost where it is today, the supplier price would have to fall by 19.4%.
| Yearly duty and goods cost today | USD 166,400 |
|---|---|
| Yearly cost with the tariff | USD 206,400 |
| Added cost per year | USD 40,000 |
| Added cost per unit | USD 2.00 |
| Increase in landed goods cost | 24.0% |
| Added cost left to you | USD 40,000 |
| Supplier price cut that holds your cost flat | 19.4% |
The currency box changes the label only. Enter amounts in the currency you choose.
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How the tariff impact calculator works
The formula
Cost with tariff = units x price x (1 + (current duty + tariff) / 100). Price cut needed = 1 - (1 + current duty) / (1 + current duty + tariff).
A new tariff lands on a base you already pay duty on, so its cost depends on the price of the goods, not on your margin. A 25 percent tariff on a USD 8 item adds USD 2 a unit before any freight or fees.
The price cut figure shows what you would have to ask for to stand still. It is almost always smaller than the tariff rate, because the supplier price is the base of the tax. That can be a useful number in a conversation about who carries the cost.
The example numbers are illustrative and are not benchmarks. Use your own data for any decision.
How to use it with your own data
- Enter the units you import in a year and the supplier price on which duty is charged.
- Add the duty you pay now and the new tariff rate from the notice.
- If your supplier will share the cost, set the share and read what remains for you.
Mistakes that skew the answer
Comparing the tariff rate with the price cut
The two differ because the tariff is charged on the price. A 25 percent tariff needs a smaller price cut to offset.
Forgetting knock-on costs
Brokerage, VAT and carrying cost all rise with the customs value, so the true impact is a little higher.
Treating the tariff as permanent
Tariffs change. Run the numbers for the rate you expect and for the rate if it is withdrawn.
What to do with the result
Take the new unit price into the landed cost calculator and compare alternative sources. Plan the conversation with the supplier using the negotiation savings calculator and the contract negotiation guide.
Questions about the tariff impact calculator
Who pays a tariff?
The importer of record pays it at the border. Who bears the cost in the end depends on price negotiation with the supplier and on what the importer can pass on to customers.
How is the tariff calculated?
The rate is applied to the customs value of the goods, which is usually the invoice value with freight and insurance added in many countries.
Should I move suppliers?
Compare the new landed cost with other sources using real quotes. Qualification and switching cost count too.
Does the calculator include VAT?
No. Add VAT in the import duty calculator if you cannot reclaim it.