Ed. note: As we were putting this article together, Trump announced a 90-day pause on tariffs for some countries but China. This news is moving fast.
President Trump’s tariffs took effect today and we figured this would be a good time to do a little roundup. It’s been difficult to sort out actual news — particularly news relevant to accounting and finance professionals — from the excess of noise. Thus we wanted to put a few things together that aren’t 4chan memes.
If you see this screenshot floating around…
…know that the text originated on 4chan.
Before we proceed with the news part, you may be interested in reviewing this fact sheet the White House released on April 2: President Donald J. Trump Declares National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security. TLDR: “Foreign trade and economic practices have created a national emergency” (direct quote), “responsive tariffs” are intended “to strengthen the international economic position of the United States and protect American workers.”
Now some news and information from around the tubes. Here’s a story published in the ever-trustworthy Financial Times on April 7: Companies get creative in finding ways to limit impact of Trump’s tariffs. For this piece, FT spoke to a couple people who know what they’re talking about regarding potential strategies to mitigate tariff effects.
“Can you lower the base through various customs planning techniques, so a good that is otherwise sourced at $100 and paying a 25 per cent tariff, can you make that good $90 paying a 25 per cent tariff?” said Mark Ludwig, head of national trade advisory services at RSM, the largest US accounting firm outside the Big Four.
“Magnify that across your universe of goods and over time those moves can add up and make you more competitive.”
Two valuation strategies in particular have increased in popularity, consultants said, as Trump has targeted industries that typically had low or no tariffs. The first involves arranging contracts with suppliers so that an importer can legally report an earlier sale price, before mark-ups by intermediaries. The second involves splitting payments to suppliers into two amounts, only one of which would attract duties.
An example could be a spirits importer whose supplier not only sold them the drink, but also provided advertising and promotional help, said Mathew Mermigousis, BDO’s customs practice leader.
In February, Thomson Reuters put out a short guide for tax and accounting professionals that sums up key tariff impacts: Decoding President Trump’s tariffs: What tax and accounting professionals need to know
- Increased costs: Tariffs directly increase the cost of imported goods, impacting businesses reliant on these materials and could lead to price hikes for consumers. This had cascading effects across various sectors, impacting supply chains and hindering growth.
- Business uncertainty: The changing nature of tariff implementations and trade negotiations has created uncertainty for businesses engaged in international trade. This unpredictability made it challenging to plan long-term, potentially impacting investment and hiring decisions.
- Tax implications: The tariffs introduced challenges for businesses in managing their tax liabilities. Understanding the classification of goods subject to tariffs, potential exemptions, and documentation requirements became crucial for accurate tax compliance.
- Impact on specific industries: Some industries, such as manufacturing, agriculture, and technology, were affected by the tariffs. Understanding the specific impacts on these industries is vital for providing targeted financial advice.
Journal of Accountancy covered the topic in Confronting tariffs: Trade war tips for CPAs, published in 2020. An editor’s note in red text at the top warns that the article is from their archives and “is provided for historical reference.”
“The content may be out of date and links may no longer function,” it says.
Here’s a more recent one from JofA: Untangling tariffs: Consumers expected to bear the brunt
@HudsonLabs has a specific example of a company’s tariff strategy:
With a 46% reciprocal tariff on Vietnam, your jeans might be getting a bit more expensive. $LEVI plans to mitigate tariff impacts through cost structure changes, vendor/customer negotiations, and surgical pricing. pic.twitter.com/yqM1Gvy45S
— Hudson Labs (@HudsonLabs) April 8, 2025
AP is maintaining a timeline of Trump’s tariff actions, posted here by PBS. At publication time, it’s updated up to April 4:
April 4
China announces plans to impose a 34 percent tariff on imports of all U.S. products beginning April 10, matching Trump’s new “reciprocal” tariff on Chinese goods, as part of a flurry of retaliatory measures.
The Commerce Ministry in Beijing says it will also impose more export controls on rare earths, which are materials used in high-tech products like computer chips and electric vehicle batteries. And the government adds 27 firms to lists of companies subject to trade sanctions or export controls.
CNBC suggests that tariffs will lead to abandoned shipments at ports with the headline “Trump tariffs will lead to abandoned freight at ports as cash-strapped businesses reject orders” and spoke to the owner of a shoe company who imports 98% of his goods from China:
His once $50 pair of men’s shoes and $35 little boys’ shoes have already gone up $80 to $65, respectively, after recent trade war moves by the U.S., with Deer Stags set to pay more than a 104% new tariff on Chinese goods being stacked atop previous tariffs.
Prior to the tariff increases in 2025, his company was paying a 6% duty on their shoes.
“Then the tariffs were raised by 10% two times, bringing my tariffs up to 26%. Then last week Trump put on an additional 34% and now the 50% levied today. All of these tariffs bring my tariff total to 110% on my non-leather shoes. My leather shoes now have a tariff of 120%. How do you budget that?” Muskat said.
He estimates that the cost of freight orders subject to the new tariffs will rise from $60,000 to between $600,000 and $1 million.
“The cash flow burden is the immediate problem,” he said. “We don’t have the capital to grapple with this. There is only one pile of money and I will pay for this, but that means I’m not paying for something else. We are going to pay the duty because we have no choice.”
Always eager to demonstrate their world class expertise in esoteric accounting topics, firms have published their own guides to tariffs.
PwC put out a PDF in March: Accounting implications of tariffs.
RSM gets way deep into the weeds: Tariffs and tax accounting: How to manage costs
Planning consideration: Review how cost accounting procedures affect tax
Issue: Potential large book-to-tax adjustments for uncapitalized tariff costs or uncapitalized variances
Action: A review of current book and tax cost allocations can identify opportunities to reduce book-tax differences by capturing any increases in costs through book capitalization, thereby creating alignment with or decreasing the required tax capitalization.
Companies using standard and burden rate costing should be reviewing their cost allocations at least regularly. However, if you haven’t been doing so, or if you anticipate significant effects from tariffs, these rates should be revisited and updated appropriately to avoid downstream tax issues. Two potential impacts of tariffs on tax cost allocation are:
- Potential increases in uncapitalized acquisition costs
- Uncapitalized inventory variances.
Generally, any tariffs paid on inventory acquired for resale goods or direct materials are required to be capitalized under the tax inventory and uniform cost allocation (UNICAP) rules. Similarly, any variances or over/under burdens for inventory are likewise required to be capitalized.
A few more tariff articles written and published by accounting firms:
- The Ripple Effect of Tariffs: Inventory, Pricing and Financial Statements [Withum]
- How tariffs can trigger surprise tax bills for manufacturers and distributors [Elliott Davis]
- Tariffs explained: your macro questions answered [EY]
- A new tariff paradigm: How businesses can respond [Grant Thornton]
Lastly, this is what President Trump had to say this morning:
We hope this has been helpful. Comments are open if you’d like to discuss tariffs, please refrain from fighting amongst yourselves and stay on topic.
