The Tariff Roller Coaster: How Founders Are Navigating Trade Volatility
by Yin Lu, Partner at MCJ
If you’re leading a climate hardware startup, you’ve likely felt the full force of today’s volatile trade landscape. After bracing for potential 145% tariffs on Chinese imports, a new deal announced earlier this week brought temporary relief, lowering rates to 30%. But the roller coaster isn’t over. One day it’s EVs, the next semiconductors or raw materials—and then, everything shifts again. Freight costs swing with little warning, and planning becomes a constant exercise in scenario modeling.
The only certainty in trade right now is uncertainty.
MCJ recently convened a group of founders navigating this very challenge. These were leaders building in carbon utilization, transportation, the built environment, and energy storage, many with supply chains tied to China or Southeast Asia. In a behind-the-scenes session, they shared what’s working, what’s not, and how they’re adapting.
Here's what we learned:
🇨🇳The China Paradox
As some founders put it bluntly:
“There’s nowhere else we can build with this speed, quality, and cost.”
Shenzhen, for example, remains unmatched for fast-turn, high-reliability manufacturing.
While the tariff rollback offers some breathing room, it still represents a 50% increase over pre-escalation norms. Every founder we spoke to is developing mid- to long-term contingency plans. Vietnam, the Philippines, Mexico, and Canada all came up in lane analysis discussions. Trade volatility has made scenario planning essential—not optional—with teams pre-negotiating alternative routings even when they’re not yet needed.
🧠 Turning Suppliers into Strategic Partners
Beyond tactics like reclassifying goods under different Harmonized Tariff Schedule codes, founders are tapping existing relationships to blunt tariff impacts. Two standout examples:
One company asked its China-based manufacturer to model the cost of shifting production to a handful of alternative countries, including sourcing, assembly, and logistics.
Another founder shared that, unprompted, their Chinese supplier had already applied for state-sponsored tariff offsets.
These kinds of exercises reframe suppliers as strategic partners, not just transactional vendors.
💬 Communication Is the New Defense Strategy
Internally, most teams are running cost scenarios and trying to avoid living by 90-day cliffs. Externally, they're fielding pressure from boards, investors, and customers who all want clarity.
The founders who are navigating this best are honest about today’s risks but clear about tomorrow’s roadmap. They’re transparent about pricing uncertainty, articulate how they’re embedding flexibility into their sourcing strategies, and show that they’re staying ahead, not reacting behind.
And when it comes to fundraising, as one founder put it:
“No investor agrees. One says tariffs are a tailwind for American manufacturing. Another says hardware is doomed. Don’t chase consensus—just show you’re thinking three steps ahead.”
🔍 Resources & Takeaways
While U.S. tariffs on China have been temporarily reduced, the trade environment is anything but stable. A 30% rate is still well above the 20% norm under both the Trump and early Biden administrations, and the 115-point drop serves as a reminder of how quickly things can shift.
Structural tariffs appear to be a lasting feature of global trade. For those navigating this reality, a trade expert in the MCJ Collective community recommends tools like the Peterson Institute’s Tariff Tracker for contextualized updates.
Ultimately, the founders who will thrive are those treating trade volatility as a permanent design constraint, not a passing storm.
🎙️ Inevitable Podcast
🌱 Brandon Middaugh, head of Microsoft’s $1B Climate Innovation Fund, unpacks how the tech giant aligns capital with climate goals—scaling clean power, carbon removal, and low-carbon supply chains to meet its 2030 targets. Five years in, she shares lessons from the frontlines of climate procurement. Listen to the episode here.
🍿 The Lean Back
See how Euclid is transforming project development operations on Inevitable.
👩💻 Climate Jobs
Check out the Job Openings space in the MCJ Collective member hub or the MCJ Job Board.
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🗓️ Climate Events
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