I know you’d rather focus on executing your strategy than get distracted by political headlines. Yet, the first three weeks of President Donald Trump’s new term have proven that rapid-fire executive orders can force every business to adapt at the same lightning speed.
The current administration isn’t treading lightly; many signals points to a swift and forceful pivot in U.S. trade policy.
For decades, the manufacturing world thrived under a stable globalization framework. In the 1990s, policies shaped by the World Trade Organization encouraged leaders to offshore lower-value tasks. Back then, China represented only about 4% of global manufacturing output. Today, it churns out more than 30% of the world’s production, driving costs down and positioning itself as the supply chain partner of choice for industrial companies around the world.
Now,Trump is determined to reverse that trend. Having long observed China’s mastery of tariffs, trade barriers and industrial policy—even praising their industrial dealmaking back in 2011—he’s set his sights on replicating those tactics at home.
Announcements are coming with lightning speed. On February 13, Trump declared his intent to roll out reciprocal trade tariffs as soon as April 2. Under this new policy, any trade barrier imposed on U.S. businesses—be it value-added tax (VAT), non-monetary restrictions, regulations or subsidies—will be met with equal tariffs. This marks a dramatic departure from the globalization norms that have defined our industry for decades.
Current key dates include:
- Mexico/Canada tariff pause: Tariffs on imports from Mexico and Canada are on hold until March 4, 2025, at 12:01 AM.
- China tariffs: A 10% tariff on Chinese imports is already in effect.
- Steel and aluminum tariffs: A 25% tariff will be implemented on March 12, 2025.
- Automotive tariffs: Trump said he intends tariffs on finished vehicle imports, slated to start on April 2, 2025.
- Reciprocal tariffs: Recommendations from Trump’s staff on reciprocal tariffs are expected by April 1, 2025.
Even if not every measure is fully implemented, the risk is too high to ignore. If there’s even a 20% chance that some of these tariffs could stick around for more than a year, the financial impact could be enormous. There are many “no-regrets” moves you can and should consider today.
For manufacturing and supply chain leaders, the key is preparation, not paralysis. Here’s what you can do immediately:
Assemble a response team: Create a dedicated, cross-functional group to monitor these policy changes and gather essential data. This team should include representatives from purchasing, supply chain, operations, legal, and customer-facing functions—and be empowered to update leadership daily on shifts coming out of Washington and responses from global markets.
Analyze your profitability: Reexamine your profit centers. Ask tough questions: Is the U.S. market critical for your key products? Can price adjustments absorb potential cost increases? It may take significant effort, but the potential profit protection will likely make it worth the work. For some firms it may no longer make sense to sell certain products into the U.S. However, pulling forward inventory into U.S. warehouse can be a good temporary measure to insulate your business for several additional weeks.
Map out your supply chain: This will require lots of calls; from the dozens of manufacturers I have worked with, databases won’t have all the answers. Engage your supply chain teams in tracking down where your suppliers source their materials. A detailed understanding now can help you avoid unwelcome surprises later.
Review your contracts: Work closely with legal and procurement teams to pinpoint where contractual exposure exists. As companies are already posturing about who in their supply chain will absorb rising costs, clarity here will be invaluable.
Develop a tariff sensitivity model: Build or update profitability models to simulate various tariff scenarios. This will allow you to quickly assess the impact of new rates as they roll out in the coming months.
The key information here will allow team members to test different scenarios—and react as new tariffs roll out:
