The results of this study show manufacturing plants are directly affected by tariffs.
Tariff insights
- According to the Plant Engineering Impact of Tariffs on U.S. Manufacturing report, tariffs are forcing U.S. manufacturers into a costly game of whack-a-mole, with two-thirds of organizations directly impacted by import duties and 60% experiencing moderate to significant increases in overall costs.
- This unpredictable and reactive environment, where companies are forced to respond by passing costs to customers, seeking alternative suppliers or absorbing expenses, contributes to the majority negative view of current U.S. tariff policies among manufacturing professionals who are seeking greater consistency and clarity.
Manufacturing professionals are constantly reacting to the unpredictable challenges presented by tariffs and trade policy shifts. Carnivals and amusement parks include a game that is a lot like the current administration’s tariffs — a game called whack-a-mole. Like tariffs, one mole or problem is addressed (or whacked) and another one or two arise in its place. Fun to play but not easy to win.
The recent Plant Engineering Impact of Tariffs on U.S. Manufacturing study on the impact of tariffs offers valuable insights for U.S. manufacturing professionals grappling with today’s complex global economy. While tariffs are intended to shape trade, the reality on the ground for plant managers is often increased costs and supply chain uncertainty, highlighting the deeply interconnected nature of modern manufacturing.
The report indicates that a significant majority, two-thirds of U.S. plant engineering professionals, have been impacted by tariffs or import duties in the past year. This has translated directly into the bottom line, with 60% reporting moderate to significant increases in overall costs. Products like electrical components, semiconductors and raw metals are cited as most affected.
Manufacturers have responded in various ways, including the difficult decision to pass costs to customers (55%) and the necessary step of seeking alternative suppliers (38%). While some have diversified globally outside of countries like China (13%), a large portion (46%) report no major change in their sourcing strategy.
Despite the stated desire for domestic reliability, actual reshoring or onshoring has been limited, reported by only 6% in this study. The challenges to bringing production back home are substantial and practical: higher labor or production costs (54%) and limited availability of domestic suppliers (53%) are primary obstacles. This underscores that while the idea of domestic production is appealing, overcoming global cost differentials and rebuilding extensive domestic supply ecosystems is a complex, long-term undertaking.
Yet, the appetite for domestic sourcing is clear. Nearly a quarter (23%) have shifted more sourcing to U.S.-based suppliers due to tariffs.
The survey reflects a nuanced view of current U.S. tariff policies, with 54% of manufacturing professionals viewing them negatively compared to just 19% positively. This sentiment likely stems from the whack-a-mole similarity to the tariff landscape, which many feel makes business decisions difficult. As one respondent anonymously said, what’s needed is “a consistent, thought-out and clearly communicated tariff policy.” Respondents also express a need for policymakers to understand the practical realities of moving manufacturing plants.
Looking ahead, plant managers seek practical government support, such as tariff exemptions on specific goods (55%) and regulatory relief for domestic production (46%). They also highlight the importance of factors like supplier reliability (55%) and clear pricing (67%) when navigating uncertainty, regardless of supplier location.
Ultimately, successfully managing the impact of tariffs requires adaptability, clear communication across the supply chain and a pragmatic approach to sourcing that considers both domestic potential and global realities. Avoiding playing whack-a-mole is high on everyone’s list.
