Title: How Import Tariffs Will Impact Your Business
Headings: How Import Tariffs Will Impact Your Business
How Import Tariffs Will Impact Your Business
Import tariffs are levied against products imported from one country to another
Cost of Goods Sold (COGS)
Inventory Value
Profit Margin

Content: So if you sell Product A for $2, your supply chain pro will tell you that the difference between your cost of goods sold and your sales price is 85 cents ($2 minus $1.15) not $1 (which would be your sales price less Product A's purchase price). Inventory Value
If you have one thousand pieces of Product A in your inventory, the total purchase price of that inventory is $1,000 (i.e. the $1 purchase price times the one thousand pieces). However, your inventory isn't just valued at how much that inventory costs —but also by how much it cost you, in total, to get it to you. That includes any import tariffs you paid. Why is that important? The value of your company is largely based on the value of your inventory (along with capital assets, intellectual property, brand value, etc.). If you've paid an incremental 5 percent or 10 percent for import tariffs, those are real dollars that should be added to your company's value. Profit Margin
Your finance folks should have a general ledger account for import tariffs. Your supply chain folks will be able to tell you what values to put into the import tariff general ledger account. Import tariffs are an important factor when considering profit margins.