Part 2: Tariff-Related Pricing—Think Strategically About Messaging And Price Increases

We are continuing our series about tariff-related price advertising. President Trump's across-the-board 10% tariffs for most imports and enhanced tariffs (up to 145%) on many products imported from China are causing some brands to explore increasing their prices on various consumer products. Best Buy's CEO, for example, told analysts to expect price increases due to the tariffs.

The price increases make sense, of course, because brands want to protect their margins so they can keep offering quality products to buyers, avoid layoffs, and generally keep the lights on. But be careful – price increase messaging can raise truth-in-advertising and consumer protection issues if communicated without reasonable legal care. Here are just a few of the possible pitfalls for the unwary.

• Avoid potentially misleading messaging: As mentioned in our Part 1 post, adding a separate "tariff surcharge" line item to transactions could violate "junk fee" and "drip pricing" laws. But what about signaling that prices are going up with pithy phrasing like "tariff price increases" or "tariff-related price increases"? Proceed with caution. Without more explanation, consumers might mistakenly read the phrase to mean that government fees are incorporated into the transaction or that the government required the brand to increase prices. Neither message is accurate, so the phrasing could (arguably) violate truth-in-advertising laws. In other words, while it is reasonable (and often necessary) for brands to increase prices in light of the tariffs, the specific language used to convey these increases could raise legal (and public relations) risks for brands.
• Be mindful about sale and discount pricing laws:Brands are working hard to track and manage a dizzying array of business realities during the tariffs, including, for example, increased product, component, and vendor-related costs, not to mention consumer tolerance for buying at higher price points. Brands might understandably choose to raise and lower their prices as they try to figure out what pricing the market will tolerate. This might mean, for example, that a brand decides to increase its price in week 1, increase again in week 2, decrease the price in week 3, etc. If price changes are communicated without sale, discount, or similar comparative pricing messaging – for example, without a "$65 $60" style message – then they are not likely to trigger laws that require the higher "regular" price to have been offered in the market for a sufficient time before a sale is offered. (U.S. state, federal, and local laws vary on the time needed to establish a regular price before issuing a sale.) On the other hand, if the regular price keeps shifting, the brand would need more time to re-establish a regular price and this could delay the ability to offer sales in the coming weeks or months. Something to consider!
• Consider pricing gouging laws: Many state laws target price gouging during periods of market disruption—like strikes, shortages, or other extraordinary adverse circumstances—by prohibiting businesses from charging grossly excessive prices for essential products and services. If tariffs significantly raise input costs, sellers might be tempted to pass on inflated costs to consumers—raising the risk that pricing decisions could trigger compliance requirements under these laws, especially if profit margins grow disproportionately.

The answer? Keep an eye on the tariffs and how your brand is thinking about pricing, and give those price increases and related messaging that extra loving (legal) care. Better to do the upfront review and reduce the potential for unwanted regulator and class action attention. We've got your back.