THE BUYER'S BRIEF - MARKET PULSE
Three weeks ago, the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act. Within hours, the administration pivoted to Section 122 of the Trade Act - a dusty statute from 1974 that caps tariffs at 15% and expires after 150 days.
That 150-day clock runs out on July 23. And if you are evaluating a business right now, that date should be circled in red on your calendar.
Here is why this matters for acquisition math. Tariffs are not just a headline - they are a line item. A Fed survey released last week confirmed what small business owners have been saying for months: tariff costs are being absorbed directly into margins. Nearly 90% of those costs stayed domestic throughout 2025. For businesses that rely on imported materials, components, or inventory, that margin compression is real and it shows up in SDE.
The problem for buyers right now is uncertainty. The current 10% Section 122 tariffs could expire completely in July, get extended by Congress (unlikely - both chambers voted against the original tariffs), or get replaced by something entirely different under Section 301 investigations the administration has already launched. Three very different scenarios. Three very different cash flow projections.
Smart buyers are adding a new question to their due diligence checklist: What percentage of this business's cost of goods comes from imported materials? If the answer is above 20%, you need to stress test the deal under three tariff scenarios - current rates hold, rates drop to zero, rates double. Run those numbers at DealScore Pro and see how the DSCR moves. If the deal only works under one scenario, it is not Bulletproof.
The flip side? Domestic service businesses with zero import exposure - commercial cleaning, home services, professional services - just got relatively more attractive. Their margins are not tied to trade policy. That is a structural advantage worth paying attention to.
The tariff landscape will keep shifting. The math does not care about politics. It cares about margins. Make sure you know where a business's margins actually come from before you sign anything.
Want to learn how to stress test any deal against market shifts like this? I walk through the entire Bulletproof method - including how to spot margin risk before it shows up in the financials - in a free 28-minute masterclass.
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