Navigating Tariffs: What Marketers Need to Know

The introduction of new tariffs — including a blanket 10% levy on all imported goods — has created uncertainty across consumer behavior, media costs, and corporate forecasting. These shifts require marketers to act quickly, stay agile, and protect performance. To navigate this evolving landscape, consider the following action items:

1. Proactively model how potential price changes could impact sales and marketing performance. Don’t wait for consumer sentiment to decline. 
2. Resist lowering CPA/ROAS goals to maintain volume during a demand shock. Allow platform algorithms to naturally adjust spend based on performance.
3. Take advantage of temporary favorable auction dynamics and unreserved publisher inventory.
4. Build revenue forecasts that account for multiple scenarios — such as varying consumer demand, tariff impacts, and media cost fluctuations — so you’re prepared to pivot as conditions change.
5. Maintain flexible budgets that allow you to quickly reallocate spend — leaning into high-performing channels and away from those underperforming due to rising costs.

What Happened?

Tariff Announcements: On April 2, 2025, President Trump announced a global 10% tariff on all imported goods, effective April 5.  Five days later, a second wave of reciprocal tariffs, ranging from 15% to 60% were levied, targeting countries with significant trade surpluses with the U.S., scheduled to take effect on April 9. These reciprocal tariffs were set to impact approximately 60 countries, including key trading partners such as China, Vietnam, India, South Korea, Japan, the European Union, and others.

Market Response: The news triggered a sharp sell-off in equity markets, with the S&P 500 losing 10.5% of its value between April 3 and April 4, 2025. The CBOE Volatility Index (VIX) — often referred to as Wall Street’s “fear gauge,” — spiked to its highest level since 2020, signaling growing investor anxiety. At the same time, the bond market saw increased volatility, as investors moved money into safer assets like U.S. Treasury bonds.

Partial Exemptions: In response to mounting pressure from tech companies, Customs and Border Protection released a limited exclusion list on April 12. The list exempted high-value technology products—such as smartphones, laptops, semiconductors, and flat-panel displays—from the new tariffs. However, many lower-margin consumer goods, including apparel and home goods, remained fully subject to the tariffs.

Current State: The situation remains dynamic. Treasury Secretary Scott Bessent recently signaled that the current tariffs with China were “unsustainable,” and rumors of new trade deals are circulating, although nothing has been formally announced.

The Impact So Far

Consumer Sentiment: The University of Michigan’s preliminary April consumer sentiment index dropped to 50.8, the second-lowest since the 1970s, while a recent Gallup survey showed an increasingly pessimistic outlook on the overall economy for most Americans. Tariff-driven price concerns and recession worries are the primary drivers of this decline.

Spending Patterns: After a brief surge in consumer activity, signs of a slowdown are beginning to emerge. In March, U.S. retail sales rose 4.6% year-over-year and 1.4% month-over-month—beating the 1.2% Dow Jones estimate and marking the strongest monthly gain since January 2023. But this spike was largely driven by anticipation of rising prices, as many consumers accelerated purchases ahead of newly announced tariffs and the looming “Liberation Day.” Now, with prices rising and uncertainty growing, early indicators show a shift in behavior: consumers are delaying non-essential purchases. Chinese fast-fashion retailers Temu and Shein, for instance, have warned of price increases and, significantly for advertisers, have reduced their U.S. ad spend on platforms like Google Shopping and Meta.

Corporate Guidance: Major corporations are taking a cautious approach to financial forecasting. In industries like airlines and retail, brands such as American Airlines, Delta, Southwest, and Walmart have withdrawn guidance altogether. These shifts reflect growing macroeconomic uncertainty, driven in part by potential tariff implications and broader concerns around inflation and consumer spending.

Considerations For Brands

Below, we answer some of the most common questions we’ve received from partners since the tariff announcement.

If I pass the cost of tariffs onto consumers, how will it affect marketing performance?

As businesses face rising costs from new tariffs, a critical decision arises: should these costs be absorbed, or passed on to consumers through higher prices? This choice can have a significant impact on marketing performance, as even small price increases can trigger disproportionately large declines in key performance indicators.

To navigate these trade-offs, many brands partner with agencies like WITHIN to stress-test different pricing strategies using projected Return on Ad Spend (ROAS) curves. These models typically explore:

• Baseline pricing, full tariff absorbed: Maintain current prices and absorb 100% of the tariff cost into your margins.
• Partial pass-through (5–10% price increase): Raise prices slightly to offset a portion of the tariff cost, sharing the burden between the business and the consumer.
• Full pass-through (10%+ price increase): Increase prices enough to fully offset the tariff, passing the entire added cost on to the consumer.

One consistent finding: Customer acquisition costs (CAC) for upper-funnel prospecting tend to rise more sharply with price increases than CAC for remarketing campaigns targeting warmer audiences. This insight helps brands more effectively allocate marketing budgets and optimize pricing strategies in response to tariff-driven cost pressures.

If tariffs cause a drop in consumer confidence and spending, how should my brand respond?

When tariffs lead to expected price increases, businesses may experience a “demand shock” — a sudden decrease in consumer willingness to buy. In these moments, it’s essential to stay anchored in a goal and constraint framework to guide decision-making. Stick to your goal and constraints, resisting the urge to loosen CPA or ROAS constraints to chase volume, as this can mask a deeper decline in intent.

Instead, manage campaign performance using weekly or monthly targets. Daily data often exaggerates short-term fluctuations and can lead to reactive decision-making in already volatile conditions.

How will tariffs impact media dynamics — and how can my brand capitalize?

Auction Media: With major spenders like Temu and Shein pulling back, a short-term window of more favorable auction dynamics has opened up, creating an opportunity for brands to invest in future customer growth. That said, in times of economic uncertainty, many brands pivot away from awareness efforts and flood lower-funnel conversion campaigns, which could drive up competition for in-market audiences.

Direct-Sold & Programmatic Guaranteed: As brands cut back on previously committed spend, publishers are left with unsold premium inventory. This creates an opportunity for others to lock in flexible, performance-tied deals on high-quality placements.

Budget For The Long-Term: In uncertain conditions, flexibility is key. Structure your media investments with room to pivot quickly based on performance data and shifting market conditions. This approach allows you to reallocate budget in real time — whether it’s doubling down on high-performing channels, taking advantage of soft auctions, or leaning in when consumer sentiment rebounds following policy updates.

Measurement Hygiene: In a volatile macroeconomic environment, traditional YoY comparisons become less meaningful. Instead, shift your measurement approach to reviewing shorter time periods, such as WoW and comparisons of performance before and after tariff implementation. This adjustment offers a more accurate view of performance.

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WITHIN can help you stay agile, protect performance, and unlock growth — despite shifting consumer behavior and rising costs. Reach out to learn more.