Mastering Supplier Negotiations in a Tariff-Driven World

How can buyers negotiate with suppliers impacted by tariffs? The goal is to gain actionable strategies that ease tariff burdens.  

Here’s how to do it, drawing from lessons in Getting to Yes, a foundation text for APD’s Strategic Negotiation program. 

Let’s see how to apply the approach when negotiating with a Chinese supplier who is likely to be impacted by tariffs.  

The Key: Preparation and Strategy 

Negotiating tariff challenges takes more than one meeting. It’s a process. Start early—before tariffs hit. Build a plan that strengthens relationships and creates shared solutions. 

1. Separate the People from the Problem 

Acknowledge that tariffs are an external force, not something either party has direct control over. This helps frame the discussion as a mutual problem-solving exercise rather than an adversarial demand for lower pricing 

Focus on long-term relationships. This matters in cultures like China’s, where trust and future planning hold value. 

Example: “We know tariffs affect both of us. Let’s find solutions to keep both our businesses competitive.” 

2. Focus on Interests, Not Positions 

Go beyond surface-level positions. Dig into the supplier’s concerns, interests and strategies. For example:   

• Are they worried about covering fixed costs or maintaining production volume?  
• Do they have flexibility in raw material costs, overheads, or logistics?  
• Could volume commitments from your side offset their need to maintain higher margins?  
• What strategies is your company exploring to remain competitive should tariffs occur? 

Ask questions like: 

• “How are tariffs impacting your business?” 
• “Are there ways we can help reduce costs to make price adjustments work?” 

This opens the door to creative solutions, like better payment terms, larger orders, or alternative materials. 

3. Invent Options for Mutual Gain 

Work together to cut costs on both sides. Here are a few ideas: 

• Combine shipments to lower logistics costs. 
• Adjust specs or materials for cheaper production 
• Look into tariff-exempt classifications 
• Commit to higher volumes for better pricing 

Example: “If we increase our order quantity or extend our contract, could we revisit the pricing structure? Perhaps there are cost-saving adjustments we can explore together?” 

4. Use Objective Criteria 

Base decisions on data. Use market prices, benchmarks, and tariff-cost analyses to guide discussions. 

Example: “Market data suggests competitors are sourcing similar products at X price, even with tariffs. Can we review how we might approach this together to stay competitive?” 

5. Develop Your BATNA 

Know your fallback (Best Alternative to a Negotiated Agreement). Options could include: 

• Sourcing outside China 
• Reshoring production 
• Adjusting specs to reduce tariff hits 

A solid BATNA boosts confidence while keeping talks friendly. 

6. Communicate Effectively 

Active listening is key. Show suppliers you understand their challenges. Keep calm and frame discussions as a collaboration. 

Most importantly, avoid emotionally charged language and focus on problem-solving rather than assigning blame.  

Example: “I understand raw material costs are rising. Could we adjust packaging or delivery schedules to make pricing work?” 

The Result: Collaborative Agreement 

Using this approach, you aim to reach a solution that not only reduces pricing but also strengthens the partnership.

By showing respect for their challenges and offering creative solutions, you’re more likely to find a mutually beneficial outcome. 

Interested in more blogs, on-demand webinars, and further resources on U.S. Trade Policy?

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