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The latest round of U.S. tariffs—specifically a 25% duty on steel and aluminum imports, effective February 12, 2025—has sent shockwaves through the manufacturing sector. These new trade policies are poised to drive up costs, disrupt supply chains, and force manufacturers across multiple industries to rethink their strategies. To remain competitive, companies are now seeking alternative products, services, and operational solutions to offset these financial pressures and maintain their market standing.
Manufacturers that rely heavily on steel and aluminum are feeling the greatest strain. While some industries may absorb or pass on these costs, others must rapidly adjust their sourcing and operational models. Key sectors facing significant challenges include:
The automotive industry, which consumes about 25% of the U.S. steel supply, is bracing for higher production costs. Automakers and suppliers are exploring alternative materials, new suppliers, and advanced manufacturing techniques to mitigate these impacts. Some companies may also reconsider reshoring or investing in domestic steel production to reduce tariff exposure.
Refrigerators, washing machines, and ovens all require significant amounts of steel and aluminum. With higher raw material costs, appliance manufacturers are looking to optimize their supply chains, improve production efficiencies, and identify alternative materials to prevent passing costs on to consumers.
Industrial and commercial machinery manufacturers, including those producing construction equipment, industrial automation systems, and farming machinery, face substantial price increases. Companies are focusing on strategic sourcing, exploring recycled metals, and negotiating long-term supplier contracts to manage rising expenses.
The aluminum-heavy beverage and packaging sectors, including canned goods and soft drinks, are particularly vulnerable. Past tariff hikes led to increased packaging costs, and manufacturers in this space are now exploring alternative materials, redesigning packaging for efficiency, and passing some costs to consumers.
Manufacturers will need to adapt to this new economic reality, and seek out innovative solutions and strategic shifts to maintain profitability and operational efficiency. Some of the key strategies include:
With tariffs on steel and aluminum imports, many manufacturers will be reassessing their supplier networks. Companies will be looking to:
• Shift sourcing to domestic steel and aluminum producers
• Explore alternative suppliers in tariff-exempt countries
• Build redundancies in their supply chains to avoid disruptions
To offset rising costs, manufacturers continue to invest in automation, AI-driven production planning, and additive manufacturing (3D printing). These technologies help reduce material waste, improve efficiency, and streamline operations.
Companies are increasingly turning to trade compliance experts and financial advisors to manage tariff classifications, apply for duty drawbacks, and explore tax incentives that may ease the financial burden.
Many manufacturers are likely to be reconsidering product designs to incorporate alternative, tariff-free materials. For instance:
• Automotive manufacturers are incorporating more composites and high-strength plastics
• Appliance makers are integrating more efficient, lightweight materials
• Packaging companies are investing in paper-based or biodegradable alternatives
As import costs rise, manufacturers will likely be considering the long-term benefits of increasing domestic production. Reshoring efforts include:
• Expanding U.S.-based manufacturing facilities
• Partnering with domestic steel and aluminum producers
• Leveraging federal and state incentives for domestic manufacturing growth
With manufacturers scrambling to adjust, sales and marketing professionals can position themselves as solution providers. Consider these opportunities:
• Supply Chain Solutions: If your company offers logistics, alternative sourcing, or procurement optimization services, now is the time to highlight those capabilities.
• Cost-Saving Technologies: Manufacturers will be more receptive to tools and services that improve efficiency, reduce waste, and optimize operations.
• Reshoring and Domestic Partnerships: As companies look for domestic suppliers, this is a prime opportunity to market U.S.-based solutions and highlight “Made in America” advantages.
• Flexible Financing Options: With rising costs, manufacturers may need financing solutions for new equipment, technology upgrades, or supply chain restructuring. Offering or partnering with financial services can be a strong selling point.
Knowing which executives are most impacted by these changes can help sales and marketing teams tailor their outreach:
• Operations & Supply Chain Executives: These are the exeutives who are directly dealing with sourcing and procurement issues.
• Finance Executives: Finance leaders will be looking for cost-cutting solutions and strategic investments.
• R&D and Engineering Executives: These decision-makers may be open to new materials and innovative manufacturing techniques.
• IT and Digital Transformation Leaders: IT leaders are likely to be exploring automation and AI solutions to offset labor and material cost increases.
Given the financial pressures manufacturers are facing, your messaging should:
• Emphasize cost savings and efficiency improvements.
• Highlight risk mitigation and supply chain resilience.
• Offer real-world case studies showing how similar companies have successfully adapted.
• Position your products/services as essential rather than optional investments.
While the new tariffs pose significant challenges, they also present opportunities for manufacturers to innovate, strengthen domestic operations, and build more resilient supply chains. Not only can manufacturers weather the current storm, they can also position themselves for long-term success in a rapidly evolving global trade environment. For sales, marketing, and business development professionals, now is the time to align with manufacturers' evolving needs, offering solutions that help them navigate these trade complexities.
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