Tariff Shock Margin Impact Calculator

Quantify how new import duties will squeeze contribution margin after factoring in customer pass-through plans, mitigation program spend, and any exclusion savings or duty drawback relief you can secure.

Value of goods subject to the proposed tariff over a full fiscal year.
Announced duty rate applied on top of current landed cost.
Share of tariff cost you expect to recoup through list price increases or surcharges.
Consulting, engineering, or relocation costs required to blunt tariff exposure.
Default 0. Enter expected annual savings from exclusions, drawback, or relocation incentives.

Consult your customs broker and trade counsel for binding rulings—this calculator is for scenario planning only.

Examples

  • Import spend $18,000,000, tariff 25%, pass-through 40%, mitigation $350,000 ⇒ Net margin erosion $3,050,000.00 (16.94% of exposed revenue).
  • Import spend $7,500,000, tariff 10%, pass-through 65%, mitigation $120,000, exclusions $275,000 ⇒ Net margin erosion $107,500.00 (1.43% of exposed revenue).

FAQ

How should I treat partial-year tariff timing?

Scale the annual import spend to the months affected or run the model twice—once for the remainder of this year and again for a full-year view.

Can I include Section 301 exclusions or duty drawback credits?

Yes. Enter the expected annual savings in the optional exclusion field so the calculator nets them against the gross tariff burden.

What if my mitigation program reduces import volume?

Lower the exposed import spend to reflect the new sourcing mix, and include any transition costs in the mitigation input to keep the analysis realistic.

How do I compare this impact to existing gross margin?

Divide the net erosion output by your current contribution margin dollars to see how much buffer remains or how steep the margin compression will be post-tariff.

What if my duty rate phases in over several tranches?

Model each tranche separately and sum the net impacts, or average the tariff rate based on the portion of spend affected by each phase for a single blended scenario.

Additional Information

  • Tariff cost is calculated as exposed import spend multiplied by the proposed duty rate, assuming full-year exposure.
  • Pass-through relief reduces the tariff hit by the share of costs you can shift to customers via price adjustments.
  • Mitigation costs increase the net margin impact, while exclusion savings subtract from the loss when credits are available.
  • The model expresses erosion both in absolute dollars and as a percentage of the exposed import base for executive reporting.
  • If mitigation is expected to reduce unit cost over time, rerun the calculator with a lower exposed spend figure to see ramp-down impact.

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