Costco’s Tariff Strategy Is a Masterclass in Real-Time Resilience

What we can learn from @Costco’s tariff playbook

Last quarter, Costco Wholesale pulled forward patio furniture shipments and rerouted tariff-impacted goods to non-U.S. markets. They ate the cost of higher tariffs on pineapples and bananas from LATAM to protect members, but let flower prices rise, seeing them as more discretionary.

Why? Because U.S. tariffs are shifting underfoot, and companies are making real-time moves to avoid getting tripped up.

Roughly a third of Costco’s U.S. sales are imports, and two-thirds of those are in non-food categories. Goods from China account for about 8% of U.S. sales.

I’ve listened to dozens of earnings calls this season, and what’s striking is how many firms are making procurement decisions daily, sometimes hourly, to blunt price shocks. At Costco, that agility means:

• Sourcing more goods locally
• Rerouting tariffed imports to overseas warehouses
• Pulling forward inventory
• Watching commodity prices hourly to time markdowns
• Compressing margins strategically where it builds loyalty.

That agility isn’t magic. It’s scale, expertise, and a brutally efficient buying model. But not every business is Costco.

Here’s the policy challenge:
Tariffs are being used like a sledgehammer, while companies are playing whack-a-mole. LIFO accounting amplifies inflation shocks, and even a few basis points of extra cost can ripple through to consumer prices.

If the next round of tariffs hits without a strategic framework, and without broader supply chain investment, the price won’t just show up at the register. It’ll be paid in lost resilience and a shrinking margin for error.