Companies are quietly stripping features, shrinking products and swapping materials while consumers are kept in the dark on ‘tariff engineering’ costs

It’s part of a broader range of tactics, such as stripping features from products, swapping out heavily tariffed materials or selling formerly included components separately. Some companies are also shrinking product sizes without lowering prices, a strategy known as shrinkflation.

In some cases, tactics used to avoid steep import fees can quietly pass hidden costs to American households, such as tools sold without batteries, furniture that requires more assembly or household goods made with cheaper substitutes that raise long-term ownership costs. Here’s what consumers should know.

What is tariff engineering?

Customs lawyers, supply chain and shipping experts say tariff engineering involves “changing an item’s materials, altering its dimensions or compositions so that the finished products can be justified to fit in a different ‘harmonized system code (2).’”

In simple terms, by making certain design or manufacturing tweaks, a product may qualify for a lower import duty. That could mean switching from aluminum to fiberglass to avoid aluminum tariffs or assembling electronics in free-trade zones.

Tariff engineering isn’t new. It long precedes Trump’s tariffs, but the practice has ramped up since he unveiled sweeping “reciprocal” tariffs in April. And it’s entirely legal.

There is nothing inherently illegal or untoward about leveraging “strategic design choices” that result in creating different products that are subject to different tariff classification and duty rates, John Foote, a customs lawyer at Kelley Drye & Warren, told CNBC.

“Tariff engineering is one of the few things you can do to try to get it right and reduce your duty liability,” he added.

For example, to lower its duty rate, Massachusetts-based Converse added felt to the bottom of its sneakers, classifying them as slippers instead of shoes (3). Columbia Sportswear added small zippered “nurse’s pockets” to some of its shirts, saving money on duties (4).

Some companies are open about it. Columbia Sportswear has a team working together with stakeholders to ensure they’re considering the impact of tariffs during the design process, Jeff Tooze, the company’s VP of global customs and trade, told Marketplace during Trump’s first term.

In many other cases, though, this is happening quietly, with no labels, warnings or disclosure.

While not every material swap is harmful, consumers may want to be more vigilant about purchases and even adjust their buying habits (5).

How to protect your wallet

Tariff engineering won’t affect all purchases, such as when Marvel reclassified its action figures as toys instead of dolls to lower its tax rate back in 2003 (6).

But when companies swap materials like wood, leather or steel for less heavily tariffed substitutes, you may not be getting the quality or durability you expect.

Shrinkflation isn’t the same thing as tariff engineering, but the goal is similar: helping companies cope with increased costs. With shrinkflation, prices stay the same while product sizes and quantities shrink, such as smaller toilet paper rolls tied to higher lumber costs (7).

Even in 2024, before Trump’s tariffs took hold, Lending Tree researchers found that about a third of 98 products they analyzed had shrunk in size or quantity (8). Paper products like toilet paper and paper towels saw the highest rate of change. Some products had not only shrunk but also increased in price. Cereal, snacks and candy were also among the biggest offenders.

So what can you do about it?

Check labels for changes in net weight or quantity. Sometimes it’s obvious, like a box used to hold eight granola bars is now holding six. Other times, the changes are subtle, such as a smaller package.

Brand loyalty has its limits. Comparison shopping and switching brands may help if you’re getting better value elsewhere. Buying in bulk is another option. A LendingTree study found that shoppers could save up to 27% on average by buying in bulk (9).