In an unexpected yet welcome move, the U.S. and China recently agreed to a temporary 90-day pause on elevated tariffs, significantly reducing import duties from previously high levels down to roughly 30%. For manufacturers like us at Atlas—and many of our clients who rely on imported components such as fastening hardware—this shift offers some much-needed relief from the intense cost pressures experienced over recent months.

What the 90-Day Tariff Pause Means for Your Business

The tariff pause means immediate cost reductions on key components, especially in product categories heavily impacted, such as industrial fastening hardware—bolts, screws, nuts, and washers. For example, a bolt that may have incurred duties exceeding 100% just a month ago can now be landed at approximately 30%, substantially lowering procurement costs.

However, it’s important to emphasize that this relief is temporary, slated to end July 1, 2025. This adds complexity to inventory and pricing decisions—particularly as many businesses currently hold inventory purchased under higher tariff conditions.

Keeping Vendors Honest: No Excuse for Price Gouging

With tariffs lowered, now is the time to engage your vendors proactively. If your suppliers increased prices during the tariff hikes, it’s reasonable to expect them to pass along cost savings now. Transparency and accountability are critical here. Reach out to your suppliers directly, confirm that prices reflect the current lower tariffs, and request updated pricing if necessary.

At Atlas, we firmly believe in transparent communication—both with our suppliers and our clients. Ensuring your suppliers reduce prices proportionally with tariff decreases helps prevent unnecessary margin inflation and keeps relationships based on trust and mutual fairness.

Managing the Inventory Dilemma: The “Tariff Squeeze”

One critical challenge we’ve identified is what we call the “tariff squeeze.” Simply put, companies now face a margin squeeze caused by inventory purchased at high-tariff rates, competing directly against new inventory arriving at lower costs. This situation is particularly relevant for parts like fastening hardware.

To illustrate, consider a scenario where bolts purchased in April at peak tariffs had a landed cost of approximately $2.30 each, while similar bolts landing in June under the reduced tariff will cost around $1.30 each. The question becomes, how do you price your products without losing margins or market competitiveness?

Practical Strategies for Managing the Tariff Squeeze

Here are a few straightforward strategies we recommend to navigate this pricing challenge effectively:

• Segmented Pricing: Clearly identify high-cost inventory and consider using it for existing, higher-priced contracts or specialized orders, while pricing new sales at rates reflecting current lower tariff costs.

• Cost Averaging: Temporarily average your costs to gradually align pricing with market conditions. Communicate openly with customers about this strategy; they’ll appreciate your transparency and fairness.

• Vendor Negotiations: Engage vendors to secure rebates or adjusted pricing for future orders, especially if your ongoing orders reflect the new tariff rates.

• Customer Transparency: Clearly communicate with your customers about these temporary tariff-induced price fluctuations. Being upfront about these market-driven changes strengthens trust and shows your commitment to fair business practices.

• Strategic Inventory Planning: Use this 90-day pause strategically. While it’s beneficial to stock up modestly on lower-cost items, avoid excessive buying. Maintain flexibility and be prepared for the tariffs to potentially rebound post-July.

Looking Forward

This tariff pause presents a unique opportunity to stabilize and reinforce your supply chain position temporarily. At Atlas Manufacturing, we’re actively working with our partners to ensure we collectively navigate these shifting market conditions wisely.

If you have questions or need guidance on managing the impacts of this tariff situation, please reach out. We’re here to help you make informed decisions that benefit your business in both the short and long term.

Thanks for staying connected—we’re looking forward to navigating these market conditions together.

Looking for a Deeper Dive? Here’s the long version of our report.

Sources:

1. Energy-Storage.news – US and China put 90-day pause on tariffs… (Cameron Murray, May 13, 2025)
2. CBS News – U.S.-China tariff truce offers temporary relief — and plenty of uncertainty (MoneyWatch, May 13, 2025)
3. Atlas Manufacturing Tariff Update (Part 1) – Steel & Aluminum Tariffs Rise to 25%… (March 14, 2025)
4. The Guardian – Could Trump’s tariffs give a green light for corporate profiteering? (Richard Partington, Apr 19, 2025)
5. Miller & Chevalier (Law Alert) – Feeling the Tariff Squeeze on Your Government Contracts? (May 2, 2025)