How should manufacturers respond to the Trump tariffs?

Manufacturers are moving quickly to adapt to the tariffs proposed by President Trump.

In the long term, many manufacturers are excited by the ultimate prospect of more industrial investment and jobs coming to the United States. But in the short term it is causing massive shocks to the industrial supply chain. And even experienced public affairs professionals don’t know what will be next.

That’s why we’ve created a step-by-step guide for manufacturers dealing with the Trump tariffs.

A quick caveat – these exact steps are written with the assumption that the USMCA will ultimately remain in place. Too many industries depend on it and industry associations like MEMA will be lobbying for it.

But in the end, the clear trend is that more of your production will need to move into the U.S.

Ready to start getting ready? Let’s dive in.

Your first step is to take a breath and create a plan. There’s no sense moving quickly if you don’t know where you’re going.

Map out a clear picture of your supply chain. What comes from the U.S.? USMCA countries? Allies? China? Know where each piece of your product originates from and what are the odds something will change in that relationship.

Make sure you’re looking out for non-tariff risks as well, like protectionist regulations and potential trade retaliation.

Set up alerts so you know what’s happening. Staying informed in this volatile first year of the administration is key.

Start engaging your suppliers and work with them to set up action plans. 

Put the solution below in place to ensure your supply chain is both durable and flexible for changes in the tariff structure.

First off, try to cut down on the value of your product that can come under U.S. import duties.

There are three major ways to do that.

Check whether your products are excluded from Section 301 tariffs

Avoid duties by reviewing free trade agreements, trade preference programs, or Chapter 98 provisions

Get your product reclassified through tariff engineering

Remove middle man markups

Deduct invoice charges that are unconnected to value of your product

Recover previously paid duties on products you sell in the country of origin

Review invoices for imported goods and customs entries to make sure they’re correct.

This is a basic overview. For a deeper dive, check out a guide from a customs broker like Dimerco.

Got parts that are outside the USMCA bubble? Time to fix that. 

The Trump administration is already thinking about granting relief from tariffs on Canadian and Mexican imports to products that comply with the rules of origin in the trade pact.

In classic dealmaking form, this exemption will likely be tied to investments in U.S. production. We’ll cover that later.

Review where all of your parts are coming from, all the way down to the raw materials.

Look for opportunities to onshore as much as possible. Which leads us to our final component.

It’s easy to cheer for more American production. But in practice, it’s difficult. Even if you build the factory, there’s no guarantee that it will be a profitable venture.

The U.S. has an expensive, aging manufacturing labor pool. Many younger workers don’t speak English as a first language and need support.

If you’re going to make American manufacturing work, you’re going to need to make your factory a smart factory. Investing in technology (like Glassdome) will allow your facility to perform at a high level without throwing legions of experienced, inexpensive manufacturing workers at the problem.