Key facts
- President Trump's tariffs have reshaped American manufacturing supply chains.
- 18% of manufacturers report losses due to tariffs, compared to 15% reporting gains.
- Manufacturers experiencing losses report an average hit of -16%, nearly double the 9% gain for beneficiaries.
- Reshoring has increased to 9% of manufacturers, more than double the 2021 level.
- Small suppliers and proprietary product makers are disproportionately affected by tariffs.
- Tariffs have interrupted recovery from COVID-19 by increasing raw material costs.
U.S. President Donald Trump's tariff-heavy trade policy has significantly reshaped American manufacturing supply chains, with mixed results for the sector. While some companies have seen benefits and reshoring efforts have increased, many manufacturers are grappling with rising material costs and negative sales impacts, according to new research.
Research by MAGNET, a nonprofit manufacturing consultancy, indicates that tariffs are colliding with broader economic instability, with economic uncertainty now rivaling workforce shortages as a top growth barrier. Specifically on tariffs, the research found that slightly more companies (18%) are reporting losses than gains (15%), and the scale of these losses significantly outweighs the upside. Manufacturers experiencing tariff-related declines reported an average hit of -16%, nearly double the average 9% bump among those benefiting.
Reshoring has gained some ground, with 9% of manufacturers bringing production back to the U.S., more than double the level in 2021. However, small suppliers are feeling the sharpest pain, with some reporting revenue losses as high as 40%. Companies producing proprietary products are more vulnerable to tariffs than those making parts to specification for original equipment manufacturers (OEMs).
Tariffs have also interrupted the recovery from the COVID-19 pandemic by increasing raw material costs, with the number of severely impacted manufacturers rising significantly. Furthermore, a less-noticed impact has been on innovation, as leaders shift time and resources to managing tariff volatility, leading to fewer new product launches.