Tariffs and U.S. Manufacturing: What We’ve Learned So Far and What Companies Should Do Now
Randy Wolken, President & CEO

Tariffs are a blunt tool, but they matter in manufacturing because manufacturing lives at the intersection of cost, supply chains, and national strategy. When the U.S. raises tariffs on imported goods or inputs, it changes the math for where things are made, how factories source components, and how companies price products. The record so far is mixed: tariffs can protect and expand specific domestic industries, but they can also raise input costs for downstream manufacturers and invite retaliation that hurts exporters. The “impact” of tariffs is therefore not one story—it’s a set of trade-offs that leaders must manage with clear eyes and disciplined execution.

What Has Been the Impact So Far?

Tariffs can increase domestic output in the targeted industries. The most direct, visible impact shows up where tariffs are aimed, such as in primary metals. The U.S. International Trade Commission (USITC) found that Section 232 tariffs reduced imports of affected steel and aluminum products, modestly increased U.S. prices, and increased domestic production in those sectors.

Many manufacturers experience higher input costs and supply-chain friction due to tariffs. Modern manufacturing is globally connected, and research from the Federal Reserve finds that industries more exposed to tariff increases experienced relative reductions in employment due to higher input costs and foreign retaliation.

At the macro level, tariff packages combined with retaliation can slow growth and reduce exports. Analysis from Yale’s Budget Lab estimates lower GDP growth and payroll employment relative to a no-tariff baseline, with exports notably lower.

Tariffs have also increased the urgency of reshoring—and the uncertainty. The Reshoring Initiative reports that policy expectations have contributed to a surge in reshoring and foreign direct investment announcements, while noting that many projects remain sensitive to policy stability.

What Is the Promise for the Future?

A visible trend is building closer to the customer. For example, GE Appliances announced investments to move washing machine production from China to Kentucky, aligning with a strategy to manufacture closer to U.S. demand.

The real promise of tariffs isn’t that they rebuild manufacturing on their own, but that they serve as one lever alongside workforce development, affordable and reliable energy, modern infrastructure, predictable permitting, and faster time-to-build. When paired with these fundamentals, tariffs can support long-term domestic investment and capacity growth.

Short-Term Strategies for Manufacturers Right Now

Manufacturers should respond to tariff volatility with clarity and discipline: build detailed tariff exposure maps, strengthen trade compliance, and make product engineering decisions. They can also use tools such as Foreign Trade Zones and duty drawback. A popular and effective strategy is to dual-source critical inputs, reprice transparently, and accelerate productivity through operational excellence. Finally, scenario planning across a variety of timeframes—such as 90-day, 180-day, and 365-day horizons—provides greater clarity into the actions chosen to withstand the short-term impacts of tariffs.

The Bottom Line—So Far

Tariffs impose real costs, particularly on downstream manufacturers, but they can also support targeted industries and accelerate conversations about reshoring and domestic capacity. The future can be brighter if manufacturers pair smart strategy with operational excellence and collaboration—using this moment to modernize, strengthen supply chains, and build a resilient U.S. manufacturing base for decades to come.