The Price Spiral: How to Rethink Pricing in the Tariff Era

What Just Happened (Again)?

If you're in a B2B company and you're making pricing decisions in 2025, you've seen this before. Disruption hit. Again. First it was 2018, then pandemic disruptions, then inflation in 2022, and now a fresh set of tariffs has rolled in—bigger and noisier than ever.

But this time, something different is happening. Prices aren’t just pressured—they’re spiraling upward. It's not a price war. It’s the opposite. We’re in a Price Spiral.

In a price war, everyone races to the bottom. In a Price Spiral, everyone’s scrambling up a staircase of costs and excuses to charge more, pass through, or hold ground. It’s tactical, reactive—and dangerous if you don’t step back and rethink the game.

This post is for managers and pricing decision-makers who are tired of playing defense. We’ll walk through what’s actually happening, what the usual responses look like (and why they’re not enough), and which counterintuitive moves might actually help you break free and gain control.

What the Smart People Are Already Doing (a.k.a. The Tactical Playbook)

Let’s give credit where it’s due. Many pricing and product teams have done the right things lately:

1. Revisiting Cost Models – Smart people are updating the total cost of a product or shipment (COGS) and cost-to-serve models. Good.
2. Segmenting Customer Impact – They’re analyzing which customers are most exposed to tariffs and making sure the big-impact clients get extra attention.
3. Prioritizing Price Moves – They’re not just raising prices across the board. Instead, they’re using exposure and strategic importance of the product portfolio to guide where to move first.
4. Scenario Planning – They’ve got a few pricing plays ready depending on how long these tariffs last or if things escalate again.
5. Sales Team Alignment – They’re prepping sales teams with communication, value stories, and comparison tools to make sure price changes don’t get fumbled.
6. Watching Competitors – They’re tracking whether others are absorbing costs or passing them on. That’s important. They’re deciding to lead or follow. You don’t want to overreact—or under-react.

All of these are smart, quick moves. They’re tactical.  But they’re still just that—tactical. They help you navigate today. But as I emphasized above, today keeps happening…. What about tomorrow?

The Counterintuitive Stuff That Actually Moves the Needle

We’re used to thinking of pricing as responsive. But what if pricing became offensive again? What if you could use this chaos to position your offer differently, tell a better story, or create pricing structures that actually make you more valuable—not just more expensive?

Let’s look at five counterintuitive moves that are more strategic than they sound:

1) Turn Tariffs into a Strength
If everyone else is flailing, use that. Offer stability. Lock in pricing (for a time). Bundle support or forecasting guarantees. Or unbundle value to create lower price options. Reliability becomes a premium offer when everyone else is panicking. Your customers hate surprises—so don’t surprise them. Position your offer as a buffer from the chaos.

2) Push Back on Suppliers
Don’t just absorb what your vendors throw at you. If your suppliers are using cost-plus contracts and rationale for price increases, challenge that. Negotiate fixed-dollar costs, especially if your volumes are steady. If you’re getting squeezed upstream, that pressure will leak into your pricing.

3) Think Like a Buyer
Today’s buyers—especially in B2B—are trained by software. They expect flexible options, clear value, and the ability to scale usage up or down. They don’t care what your input materials cost—they care what your solution helps them do. Align pricing with how buyers want to exchange value for money—based on usage, outcomes, and perceived value.

4) Use Price Psychology
This isn’t art—it’s just how humans work. People don’t always decide based on logic. The way a price is shown, the timing of a change, or what it’s compared to can all shape how they react.  If you need to raise prices because of higher costs, make it feel thoughtful. Add something new to the offer, give a simple reason, and choose your timing carefully. Even small changes in how you present the price can make a big difference in how it’s received.

5) Own the TCO Conversation
When customers get price increases, they turn into bean counters. Meet them there—but bring a calculator and help them see the total cost of ownership. Shift the focus from unit price to lifetime cost, support burden, downtime risks, and so on. This turns a pricing discussion into a business decision.

These aren’t stunts. They’re moves grounded in Profit Streams™, a pricing framework that focuses on long-term sustainability and profitability of the business model and solutions—not short-term revenue patches. They make sense because they tie pricing to the full value you create and the cost structures you can control.

Legacy pricing is collapsing under the weight of years of volatility. Customers are skeptical, CFOs are ruthless, and competitors are not always rational either.  And that’s why a purely tactical playbook won’t cut it anymore. Your job now isn’t just to adjust prices. It’s to reset the conversation.

Conclusion: Stop Reacting, Start Reframing

Commercial leaders can keep scrambling every time tariffs shift, reworking plans every few months just to keep up. But each reaction adds complexity—and with it, a growing burden on pricing administration.

There’s another option: start rethinking how pricing supports the broader business model.  This doesn’t require a pricing lab or a team of consultants. What it takes is:

• Clear visibility into your cost drivers and how customers perceive value
• The willingness to challenge legacy pricing habits
• A pricing model built for resilience—flexible enough to adapt, without constant rework

The Profit Streams™ mindset doesn’t promise perfect prices. But it gives you a better compass. In 2025, pricing is no longer just about margin protection. It’s about business model design. And if you’re reading this, you’re already in the right frame of mind to stop spiraling—and start leading.

Got a messy pricing situation or tariff impact you’re navigating? Click here to schedule a conversation. And, if you want, click here to see the training schedule and/or click here to get PS book extract.