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3 Strategies to Navigate Tariffs, According to Dieux’s Charlotte Palermino
In an increasingly complex global trade landscape, small businesses are facing unprecedented challenges as tariffs continue to rise. For Charlotte Palermino, co-founder and CEO of the skincare brand Dieux, navigating these uncertainties has become a cornerstone of her leadership strategy. Drawing from her firsthand experience with international supply chain disruptions and escalating costs, Palermino has developed three key strategies to help small businesses not only survive but thrive amid the turmoil of 2025’s tariff landscape.
1. Build Flexibility Into Your Supply Chain
One of the most critical lessons Palermino has learned is the importance of diversifying your supply chain. With tariffs on Chinese goods reaching as high as 145%, relying on a single supplier or region can be a recipe for disaster. “You can’t put all your eggs in one basket,” she warns. Instead, businesses should explore multiple sourcing options, seeking out manufacturers in countries not subject to the same tariffs. This might also involve reconfiguring your supply chain to incorporate alternative materials or partners.
However, Palermino cautions that diversification isn’t without its challenges. Each new supplier or material comes with its own set of risks, including potential delays and inconsistent quality. To mitigate these risks, thorough vetting and contingency planning are essential. By building flexibility into your supply chain, you can reduce your vulnerability to sudden regulatory or tariff changes.
2. Get Creative With Shipping and Product Logistics
As tariffs continue to fluctuate, so too must your approach to shipping and logistics. Palermino suggests exploring different shipping partners or methods to optimize costs and minimize the impact of tariffs. Even small adjustments, such as altering package sizes or weights, can make a significant difference in reducing duty payments.
Another key strategy is to closely track tariff codes and harmonized schedules. Even minor changes in product classification can have a major impact on duty rates. Working with customs brokers and utilizing duty drawback programs can also help limit upfront tariff payments. Additionally, leveraging foreign trade zones or bonded warehouses can provide a financial cushion against unexpected changes.
3. Be Transparent With Customers and Partners
As costs rise and supply chains become increasingly unpredictable, transparency becomes more important than ever. Palermino emphasizes the importance of being open with customers about pricing changes and delays. At Dieux, explaining the impact of tariffs on materials and production timelines has helped build goodwill and understanding with their audience.
Transparency extends beyond the customer-brand relationship. Collaborative relationships with suppliers and fulfillment partners are crucial. By sharing information about upcoming changes, all parties can adjust expectations and workflows collaboratively. This open communication not only strengthens partnerships but also fosters a sense of shared problem-solving.
Additional Considerations
Navigating the complexities of tariffs requires a holistic approach. Palermino underscores the importance of understanding legal and compliance issues, such as customs requirements and country-of-origin labeling rules. Staying informed about policy changes through official channels and industry groups is also crucial, as tariff regimes and trade policies are constantly evolving.
Small businesses should also assess the broader impact of tariffs on their overall strategy. This includes evaluating how competitive position, demand forecasts, and product offerings might shift in response to new trade policies. In some cases, these changes can even create opportunities for market differentiation or innovation.
Finally, preparing for the financial impact of tariffs is essential. Small businesses often have limited cash flow and negotiating power, so proactive planning is key. This might involve assessing margin pressures, exploring price adjustments, and considering financial instruments or insurance to protect against major disruptions.
For Palermino, the key to navigating the uncertain landscape of tariffs lies in resilience and openness. By building flexibility into your supply chain, getting creative with logistics, and fostering transparency at every stage, small businesses can not only weather the storm but emerge stronger on the other side.
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Additional Considerations
Understanding legal and compliance issues is another critical aspect of navigating tariffs. Palermino emphasizes the importance of staying informed about customs requirements, country-of-origin labeling rules, and documentation needed for new suppliers. This awareness helps avoid costly errors and delays that can arise from non-compliance. Small businesses should invest time in understanding these regulations to ensure smooth operations and avoid legal hurdles.
Monitoring policy changes is equally important, as tariff regimes and trade policies are fluid. Palermino advises businesses to stay informed through official channels and industry groups. This proactive approach allows companies to quickly pivot strategies if conditions change. By keeping a finger on the pulse of trade policy developments, small businesses can anticipate and adapt to new challenges before they become critical issues.
Analyzing the overall business strategy is another key consideration. The impact of tariffs extends beyond immediate costs, affecting competitive position, demand forecasts, and product offerings. Palermino suggests evaluating how these factors might shift in the new environment. In some cases, changes in trade policy can create opportunities for market differentiation or innovation. By assessing these shifts, businesses can uncover new avenues for growth and adaptation.
Preparing for the financial impact of tariffs is essential, especially for small businesses with limited cash flow and negotiating power. Palermino recommends proactive planning, including assessing margin pressures and exploring price adjustments. Additionally, considering financial instruments or insurance to protect against major disruptions can provide a safety net. This financial preparedness ensures that businesses are resilient in the face of tariff-related challenges.
Conclusion
Ultimately, Palermino’s approach is rooted in the belief that resiliency and openness—across supply management, logistics, and customer relationships—are essential for small businesses facing the uncertainty of evolving tariff landscapes. By planning ahead, staying nimble, and fostering transparency at every stage, brands can better survive and even thrive amid trade policy upheavals.
Conclusion
In conclusion, navigating the complexities of tariffs in 2025 requires a strategic and proactive approach. Charlotte Palermino’s three key strategies—building flexibility into your supply chain, getting creative with shipping and logistics, and fostering transparency with customers and partners—provide a roadmap for small businesses to not only survive but thrive in uncertain trade environments. By staying informed about legal and compliance issues, monitoring policy changes, and preparing financially, businesses can build resilience and adaptability. The key lies in embracing openness and collaboration across all aspects of operations, ensuring long-term success amid tariff challenges.
FAQ
What are the three main strategies for navigating tariffs?
The three main strategies are: 1) diversifying your supply chain to reduce reliance on a single supplier or region, 2) exploring creative shipping and logistics solutions to minimize tariff impacts, and 3) fostering transparency with customers and partners to build trust and collaboration.
How can small businesses build flexibility into their supply chain?
Small businesses can build flexibility by diversifying suppliers, exploring alternative materials, and reconfiguring their supply chains to incorporate multiple sourcing options. Thorough vetting and contingency planning are essential to mitigate risks associated with new suppliers or materials.
What are some ways to reduce shipping and logistics costs impacted by tariffs?
Businesses can reduce costs by optimizing package sizes and weights, leveraging duty drawback programs, and utilizing foreign trade zones or bonded warehouses. Closely tracking tariff codes and working with customs brokers can also help minimize duty payments.
Why is transparency important when dealing with tariffs?
Transparency builds goodwill with customers by explaining pricing changes and delays. It also strengthens partnerships with suppliers and fulfillment partners, fostering collaborative problem-solving and shared expectations.
How can small businesses stay informed about tariff policy changes?
Small businesses should monitor official channels and industry groups to stay updated on trade policy developments. Proactive monitoring allows businesses to anticipate and adapt to changes before they become critical issues.