Trump’s 2025 Tariff Plan: Business Strategies to Boost Cash Flow and Reduce Tax Burden

On April 2nd, President Trump released a long-anticipated tariff plan. This new plan includes 25% tariffs on automobiles, a 10% baseline tariff, and reciprocal tariffs on countries the administration labeled “the worst offenders.” Under this new plan, the auto tariffs will go into effect on April 3rd, the 10% tariff on April 4th, and the reciprocal tariffs on April 9th.

Instituting these tariffs so quickly will likely generate ripple effects across the economy, with businesses struggling to determine how to implement them. Does a business pass the increased cost along to their clients immediately? Or do they eat some of the increase in the short term while looking to adjust the price to clients over time? Do companies move manufacturing operations to the U.S., or will that decrease international sales as reciprocal tariffs come into play? New clarity on the tariff raises more questions. However, business owners waiting for clarity to act could put them at a disadvantage. What are businesses to do now?

One of the first things business owners can do is look to access as much cash as possible. While the 2024 tax filing season is almost over, taxpayers should still consider ways to minimize their tax liability, even by leveraging short-term timing adjustments. This will reduce the tax owed, increasing cash flow to help acclimate to the new tariff environment. One strategy is reviewing potential depreciation opportunities through cost segregation tied to a 3115, a change in accounting method, or looking for other deductions they can pull forward. By ensuring no stone is left unturned, businesses can generate cash to assist in making business decisions as more clarity on changes to global business emerges.

Another strategy for businesses is to look at fixed expenses. One area businesses often overlook is property tax. Property tax revenue is attractive to states as it is considered “stable,” meaning it does not go up and down as business revenues change. That said, business owners can appeal their property tax assessments. An appeal of a property tax assessment could lead to a reduction in tax liability, increase cash flow, and allow the business to make moves to adjust to the changes created by the new tariffs.

Other opportunities for businesses will come as they settle into the new environment. As a business looks to adjust its models due to the changes, what should it consider? Take a business looking to move manufacturing operations back to the U.S. to get around the tariffs. Looking at State and Local incentives to minimize the cost of the new manufacturing plant is critical. Many states and local governments will provide lucrative business incentives to move operations to their municipalities. Businesses looking to onshore operations also need to consider these incentives to ensure their business is profitable compared to industry competition.

Once companies move to onshore manufacturing, other considerations are on the table for discussion. There are tax credits and incentives for manufacturing, such as the R&D tax credit, that could increase or change if more manufacturing is completed in the U.S. As those same companies build facilities, do they take advantage of tax credits for solar systems and other alternative energy properties?

But what about businesses that do work in other countries? While a business looking to sell to U.S. consumers may look to onshore operations, reciprocal tariffs might mean a company looking to sell to foreign markets may look to offshore some of its operations. Then, it becomes critical to understand this move’s emerging international tax implications. As tariffs settle down, a business may move from a higher-tariff country to a lower-tariff country, bringing in more implications and questions. Business owners must talk with qualified International Tax experts before making any moves to ensure all ramifications are carefully thought through in planning.

While the tariff implementation was expected, businesses must understand all the implications. Some of the initial instability of these new taxes will be inevitable, and companies need to make all moves possible to boost cash flow and confirm they can come out ahead.