Tariffs, pricing, and power

The role of a commercial leader is rarely defined by bold, public moves. It plays out behind the scenes, in how companies set prices, weigh margin risk, and recalibrate product portfolios under pressure. Most of the time, this quiet coordination is enough. Customer expectations can be shaped. Currency swings can be hedged. Inflation can be tracked.

But tariffs are different. They arrive without warning, strike unevenly, and upend entire pricing models overnight.

In 2025, tariff measures have become a defining force in global trade, reignited by geopolitical tensions, supply chain nationalism, and shifts in industrial policy. Businesses are being pulled into a trade environment where cost structures can change overnight. Unlike inflation, which tends to rise predictably across the economy, tariffs hit in targeted, often asymmetric ways – by product, by partner, by region.

Suddenly, price becomes the most exposed part of the business. Categories that once delivered stable margins demand urgent re-evaluation. Competitors respond unpredictably. Customers expect answers before internal alignment has even begun.

For many leadership teams, tariffs aren’t just a policy problem. They’re a moment of truth.  A test not of reaction time, but of whether the company truly understands its pricing power, its vulnerabilities, and its ability to adapt without losing control. 

These are the kinds of decisions that don’t sit neatly in policy or procurement. They fall squarely within the remit of commercial leadership. And they’re increasingly defining the difference between reacting to disruption and leading through it.

Simon-Kucher’s recent whitepaper, Tariffs, pricing, and power¹ reframes this challenge not as a policy issue, but as a leadership one. The paper’s core is built around six questions, each aimed at surfacing blind spots, testing outdated assumptions, and pushing leaders to rethink pricing not as a downstream adjustment, but as a CEO-level concern. Together, these questions move beyond technical fixes, asking whether companies truly understand where they hold pricing power, whether they are relying on the right approaches, and whether their internal structures can match the speed and complexity of today’s volatility. They challenge leadership not just to respond to tariffs, but to use them as a lens to expose deeper strategic vulnerabilities and opportunities. 

One of the sharpest insights is how many companies are still reaching for the wrong playbook. The old definition of pricing power – raising prices without losing volume – no longer holds. Today, it means the ability to act with precision: to adjust pricing by region, segment, or SKU, backed by real-time insight. 

Then there’s the question: Do we know our pricing power? It sounds basic, but in volatile markets it becomes foundational. The report argues that pricing power isn’t proven in spreadsheets, but rather in market reality. When tariffs hit, the difference between a confident response and a costly misstep often comes down to whether a business knows which products can absorb an increase, which can’t, and where flexibility exists to shift value, not just cost.

Simon-Kucher’s most recent work also describes how the most resilient companies are abandoning the binary debate over centralization versus decentralization. Instead, they’re building models of coordinated autonomy, where global teams define strategic corridors and local teams act within them, supported by shared data and real-time escalation paths.

Underlying all of this is a final, more fundamental shift: the disconnect between cost, price, and value. In stable markets, those elements perhaps moved somewhat in parallel. But under pressure, they drift apart. As pricing strategies rooted in cost mechanics lose relevance fast, it’s time to treat price as a reflection of customer perception, grounded in value, not spreadsheets. 

For CEOs, this becomes a litmus test: Is pricing anchored in reality, or in habit? Are assumptions being challenged, or carried forward by default? As the report makes clear, a company that doesn’t know where it has pricing power doesn’t have a pricing strategy. It has exposure.