Tariff Paralysis: Why Brands Can't Seem to Make a Move

Welcome to the Great Tariff Paralysis of 2025

So what do we do when uncertainty creates chaos and confusion? Dust off the models and frameworks, of course!

Shouldn’t The Four C's Make This Easy?

Business schools and consultants love their frameworks, don't they? Having spent time in both, I can answer emphatically in the affirmative. And the current darling for navigating tariff chaos is the Four C's approach to manufacturing decisions:

• Capability: Can the new location actually make your stuff properly?
• Cost: Will moving save you money after factoring in tariffs, logistics, and that inevitable "surprise" expense nobody mentioned?
• Compliance: Can you meet regulatory requirements without your legal team having a collective meltdown?
• Capacity: Is there enough production capacity available, or are you competing with every other panicking brand for the same factory space?

In theory, this framework should make decision-making crystal clear. Run the numbers, check the boxes, and voilà—optimal manufacturing location achieved.

Except it's not working. At all.

Why Every Brand Is Frozen in the Headlights

I've spoken with executives at over two dozen consumer brands in the past month. The conversation always follows the same pattern:

"We've identified three potential new manufacturing locations."

Great! So you're moving?

"Well, no. We're still gathering data."

Data you've been gathering for how long?

"Well, we’ve been contingency planning for about nine months." It turns out a lot of companies were planning for this early in the last election cycle.

The cold, uncomfortable truth is that brands aren't moving production because they're paralyzed by uncertainty. And it's completely understandable. Here's what's really happening:

The Moving Target Problem

Remember when the tariff rate was going to be 10%? Then 25%? Then 145%? Then maybe just on certain categories? Then, potentially across the board? Now imagine trying to make a multi-million-dollar decision when the fundamental variables keep changing every few weeks.

One supply chain director told me, "Every time we run the numbers, the goalposts move. It's like trying to land a plane on a runway that keeps teleporting."

The Election Aftermath Uncertainty

The 2024 election is behind us, but clarity isn't exactly forthcoming. Given the mixed signals that are being sent from various parts of the administration, Brands are left wondering: Do we make moves based on what's happening now, or what might happen 3-6 months from now?

The "Everyone's Waiting" Phenomenon

There's also a strange psychological standoff happening. Brands are watching their competitors, who are watching them, who are watching other competitors, and nobody wants to make the first big move.

"We don't want to be first to commit to reshoring if it turns out tariffs ease next year," said one executive I talked to last week. "But we also don't want to be last if tariffs increase and all the good domestic manufacturing capacity gets snapped up."

It's like a very expensive, very consequential game of chicken.

When the Four C's Become the One P: Paralysis

The Four C's framework assumes you have reliable data to evaluate. But when the underlying assumptions keep shifting, even the best framework becomes useless. It's like trying to use a precision measuring tool during an earthquake.

That's how we end up with what is often referred to as “analysis paralysis.” More spreadsheets, more scenarios, more meetings... and zero actual decisions.

How to Break the Paralysis

So, what can we learn from the brands that are ARE successfully navigating this mess doing differently?

1. Embrace scenario planning with trigger points: Instead of trying to predict the unpredictable, they've identified specific trigger events (like tariffs exceeding certain thresholds) that automatically activate pre-approved plans.
   
   
2. Making smaller, reversible moves: Rather than relocating entire production lines, they're testing new manufacturing relationships with limited SKUs or seasons.
   
   
3. Build flexibility into contracts: New manufacturing agreements include specific clauses about tariff changes and how costs will be shared.
   
   
4. Stop waiting for perfect clarity: They recognize that what their waiting for will never come and are making the best decisions they can with the information available today.
   
   
5. Consider total cost, not just tariff impact: The smartest brands are looking at long-term resilience, not just short-term tariff avoidance.

The Bottom Line

The Four C's aren't failing because they're wrong. In certain contexts, they make all the sense in the world. They're failing because they require a level of certainty that simply doesn't exist right now. Brands that are breaking through the paralysis are the ones that have accepted uncertainty as the new normal rather than a temporary state to wait out.

In a world where the only certainty is uncertainty, the worst decision is no decision. The tariff situation will continue evolving, but the cost of paralysis only grows with time. The most successful brands in 2025 won't be the ones who predicted the future perfectly, they'll be the ones who built systems flexible enough to adapt to whatever comes next.

So maybe it's time to add a fifth C to the framework: Courage.

David Kalman is a strategic leader with over 25 years of experience. He supports Trillora’s efforts in delivering smarter packaging solutions that help brands optimize performance, sustainability, and cost efficiency.