A ‘wobbly’ moment in business: Manufacturers face life under Trump’s tariffs

Companies are pushing to be more agile and flexible as the Trump administration’s baseline 10% tariff takes effect, but supply cost challenges loom ahead. Manufacturing industry observers have long speculated about how heightened tariffs could impact U.S. companies, and whether President Donald Trump’s bet that the duties would spur a new era of domestic production would prove true. 

Now that the president has imposed a slew of new tariffs, including a 10% baseline tax on all imports, the manufacturing industry is trying to understand how the policies could impact both supply costs and consumer demand.

Industry groups were mixed in their reactions to the tariffs. Some, like the American Iron and Steel Institute, reacted positively, saying “government action to address this unloading of steel overproduction on world markets is overdue.” Others, such as the Plastics Industry Association, pushed for targeted tariffs, rather than across-the-board measures that disrupt supply chains and increase production costs.  For The Partner Companies, a Chicago-based specialty manufacturing firm spanning industries such as aerospace, energy and telecommunications, Trump’s previous tariffs have not had a material impact on the business, said co-founder and co-chair Scott Bekemeyer. However, heightened trade uncertainty has affected some customer demand, with certain orders coming through in smaller volumes than expected or not at all due to a lack of industry visibility.

The administration’s evolving tariff strategy makes it difficult for companies to make significant supply chain shifts, for fear policies could quickly change, Dan Brumlik, co-founder and co-chairman at The Partner Companies, said in the days leading up to what Trump dubbed “Liberation Day” on April 2. 

“It’s just a very wobbly moment in business,” Brumlik said. “It’s been stated that this is purely a negotiating strategy to get others to the table for trade talks, and if you set up the system based on tomorrow’s tariffs and a month later they change it, how do you respond?”

 The Partner Companies, which has manufacturing locations across the U.S., Mexico, China and Wales, is working to offer in-country manufacturing when possible to avoid tariffs, and to give customers as much flexibility as possible. “We can do Mexico for the world, U.S. for the U.S., China for China, or any combination of those,” Brumlik said. “We have redundant capabilities in multiple countries so we can help our customers adapt to whatever the situation is.”Further leaning into its global supply chain is part of The Partner Companies’ strategy to weather the tariff storm, Bekemeyer added. The company is considering more locations both inside and outside the U.S., to avoid tariffs on either side of the border.

 It’s also considering more collaboration with partner manufacturers to leverage each firm’s location, with the option to contract manufacture for a foreign-based firm at one of its U.S. locations.