Tariff Impacts on Manufacturing: Mitigating the Challenges

After a flood of headlines with major implications over several consecutive weeks, most of the U.S.’s new reciprocal tariffs have been paused for 90 days, but several significant ones remain in place. Your news feed, television screen and email inbox have undoubtedly been full of mentions. This lull is a good time to either educate yourself on the facts or review the development in greater detail.

We’ll take it step by step, explaining which product categories and countries are being targeted, how different manufacturing sectors will be affected and what you can do to mitigate the challenges that come with tariffs.

At the time of this writing, it’s impossible to predict how the U.S. tariff strategy will change. Every headline has major implications, and every report has details to be investigated. The situation is evolving rapidly, so the tariffs covered below may be modified or even lifted, and others might be put in place.

That said, this blog should give you a good grasp of the scene as it stands, the dust settling after a climactic flurry of action. We’ve also got insights into how individual manufacturing segments will be impacted and tariff mitigation strategies you can implement to minimize the disruption to your business.

The Facts on Expanded, New, Planned and Proposed U.S. Tariffs

Not all the U.S. tariffs that have been in the news recently are entirely new. Some existed previously and have been expanded and reinforced, while others were newly announced and implemented in the past few months. There are also several tariffs that were planned to go into effect soon, as well as some that had only been proposed to this point, that may or may not come to pass.

Steel Products

Originally enacted in 2018 under Section 232 of the Trade Expansion Act of 1962, U.S. steel tariffs were expanded on March 12, 2025. The new package uses the same 25% base rate as the 2018 tariffs but allows for fewer exemptions and attempted to close commonly exploited loopholes like transshipping (using an intermediary country to pass off goods from one country as imports from another).

Steel pipes, tubes, bars and rods are frequently imported by U.S. manufacturers, as are flat-rolled and stainless steel. Canada and Mexico are the top two suppliers, in part due to proximity but also because many imports—including steel—are exempt from tariffs under the U.S.-Mexico-Canada Agreement (USMCA). Therefore these tariffs mostly apply to steel imported from other common suppliers like South Korea, Brazil and Japan.

Aluminum Products

The aluminum tariffs were originally put into effect in 2018 just like the steel tariffs, but with a base rate of 10%. The new package increases that to 25% and, like the package for steel, is designed to limit exemptions and evasion through loopholes. What’s more, it was expanded to canned beer and empty aluminum cans in March 2025, just a few weeks after going into effect.

Many manufacturers import aluminum ingots, sheets, plates, strips, tubes, rods and foil. Canada is the top provider, followed by Mexico, but like steel, aluminum is exempt from tariffs under the USMCA. That means these tariffs affect mostly aluminum from China, Germany and the United Arab Emirates, the U.S.’s other top suppliers.

Automobiles

Legally based on a 2019 U.S. Commerce Department investigation, the U.S. federal government enacted a 25% tariff on all imported automobiles and certain auto parts on April 3, 2025. Those are both protected from tariffs under the USMCA, but the new package increases the requirements to qualify for an exemption, so this tariff still applies to cars and parts imported from Canada and Mexico that don’t meet certain content criteria.

Auto imports from Germany, Japan and South Korea are the products that were most affected by this recent development. While manufacturers don’t always have a great need for automobiles, those that conduct their own transportation operations and have a fleet of vehicles could be heavily impacted by this tariff.

Chinese Goods

Various tariffs on specific types of goods have been imposed by the U.S. during the ongoing trade conflict with China, but this latest is the most far-reaching, applying to all Chinese goods across the board. The base rate was originally 10% when the tariff was first enacted in February 2025, but it’s since been increased to 20%, and then again to 125% on April 9, when the pause was announced and initiated.

Manufacturers import many different products from China, including the machinery and tools that they use to manufacture their own goods. Electrical components are also frequently sourced from China, as are chemicals, plastics, rubber, textiles, fabrics, not to mention steel and aluminum, so this tariff affects many sectors.

Canadian Goods

A new blanket 25% tariff on all products imported from Canada is only partially in effect at this time. Exemptions for USMCA goods have been extended indefinitely. In 2024, 38% of the U.S.’s imports from Canada were USMCA-compliant, so this new tariff would have applied to more than half of the total quantity.

Canada is a major provider of agricultural products (particularly dairy, eggs and poultry), chemicals and lumber, not to mention aluminum and steel. All of these goods are applicable for USMCA exemptions, but there are quotas, content requirements and rules of origin that determine whether or not a specific imported product qualifies.

Mexican Goods

Announced and enacted alongside the blanket tariff on Canadian imports, this blanket tariff on Mexican goods also has a base rate of 25% and is technically only partially in effect. Exemptions have now been extended indefinitely for goods covered under the USMCA. Notably, the Mexican government had announced that it aimed to increase the percentage of products that qualify from the 50% rate of 2024 to between 85 and 90%.

Many agricultural products (especially fresh produce and meat), automotive parts, metals and electrical components are imported from Mexico by U.S. manufacturers. There are exemptions under USMCA for all these classes of products, but only if the items themselves are compliant with regional content and country of origin rules.

Universal Import Duty

This sweeping 10% tariff taxes all imports to the U.S., regardless of product type, country of origin, value or any other characteristics. For now, pharmaceuticals, uranium, crude oil, semiconductors and some other products are exempt, but the U.S. government is considering separate tariffs on each of those categories that could be imposed in the coming months.

It’s important to note that the 10% rate—announced on April 2 and put into effect April 5, 2025—is just the baseline, and higher rates for specific countries were planned for announcement and enforcement at some point in the future, but that is also covered by the pause (rates will not change until at the soonest July). As this is a universal tariff, it will impact all manufacturers that import goods from outside the U.S.

Paused: Reciprocal Tariffs

Devised to correct trade imbalances between the U.S. and other nations, these retaliatory tariffs were briefly imposed on imports from 60 countries at rates that vary based on their trade surplus with the U.S. That means that they were not technically reciprocal in all cases, as the U.S. was not necessarily charging the same rates for the same products that trading partners charge on U.S. and instead using a formula to determine the percentage.

Goods from trading partners with the largest surpluses—like China, the European Union, Mexico and Vietnam—were charged the highest rates. All those countries were major suppliers for U.S. manufacturers, with China and Mexico in particular among the top providers of many product categories mentioned above.

Planned and Proposed Tariffs

The following tariffs were either planned for future enactment or have been proposed, but their enactment is uncertain:

• 10% on Canadian oil and gas – Planned for enactment March 4, 2025; currently delayed

• 25% on countries importing Venezuelan oil – Announced March 24, 2025; planned for enactment after April 2

• Digital service taxes (DSTs) – Announced February 21, 2025; under Section 301 investigation

• Copper – Announced February 25, 2025; under Section 232 investigation

• Timber and lumber – Announced March 1, 2025; under Section 232 investigation

Given that the global economy is in flux and other nations are concurrently enacting tariffs, it is likely that this list will change and/or be added to as the year progresses.

Current and Expected Tariff Impacts on Manufacturing Businesses

You need raw materials to manufacture goods, and in some circumstances you might choose to purchase from an overseas supplier, whether it’s for reasons of affordability, availability, quality or some other variable. It’s entirely possible that your current supply chain extends outside the U.S., as the National Institute of Standards and Technology found that U.S. manufacturers import more than 20% of their intermediate goods.

All manufacturing sectors are affected by the universal import duty, and most are impacted by one or more of the other tariffs. These are a few that are likely to get shaken up significantly:

Automotive

Between the steel, aluminum and auto parts tariffs, automotive manufacturers that import materials are already seeing costs go up, and domestic suppliers and manufacturers are facing heightened demand. Mexico is one of the U.S. automotive industry’s top suppliers, so USMCA exemptions may apply, but the goods must meet the requirements to qualify for one—which include specific criteria for determining country of origin.

Electronics

The increased rate on imports from China means that many electronics manufacturers are either paying more for their electrical components and semiconductors or finding new U.S.-based sources, who themselves must keep up with increased order volumes. Mexico is another major supplier in those two product categories, though USMCA exemptions apply for those goods that qualify.

Industrial Equipment

This sector is being impacted by several of the new tariffs, including those on steel, aluminum, Chinese imports (machinery, electrical components and semiconductors), Canadian imports (steel and aluminum, USMCA exemptions may apply) and Mexican imports (metals and electrical components, USMCA exemptions may apply). And as in other segments, nearshore sources are pressed to ramp up production.

Fashion and Apparel

U.S. fashion and apparel manufacturers very commonly import textiles, fabric rolls, footwear components, zippers, buttons, fasteners, trim, synthetic fibers and yarn from China. It is now considerably more expensive to do so, though, so local suppliers and manufacturers are dealing with more orders than before and pressure to produce.

Food and Beverage

Mexico is a prolific source of fresh produce for U.S. food and beverage manufacturers, but most of those products are exempt from tariffs under USMCA (rules of origin still apply). Seafood is often imported from China, so businesses that source from there are dealing with higher costs. The universal import duty may be most significant in this sector given that a common raw material—sugar—is also frequently imported from various countries. And of course, demand for domestic is up.

Tariff Mitigation Strategies for Manufacturers

When it comes to the pain points that tariffs bring, there are two simple, high-level strategies that are considered best practices. Because you’ll be spending more, you need to find ways to save. And because you may face greater domestic demand, you’ll want to increase your business’s operational efficiency—which should also help with your profitability.

Reducing Costs

When you’re paying more in one area than you normally would, you look for ways to reduce manufacturing costs, whether that’s on the stuff that’s costing you more or something else. You may choose to continue buying from overseas sources for any of a number of reasons—it’s feasible that you might even save that way if you can find an acceptable product for a cheap enough price.

But it’s natural and in many cases wise to think about changing suppliers to a local source. Using local ingredients has become a key selling point for many brands, and while you might not want to risk disruption by changing up your supply chain, there are tools that can make it easier. For example, manufacturing enterprise resource planning (ERP) software has supplier portal functionality that makes purchasing from someone new much easier.

ERP can also give you much greater financial visibility—cost optimization in the manufacturing industry may be challenging, but with the system’s administration and reporting tools, you can analyze your margins, identify areas of improvement, boost profitability and make your best, most informed decisions. Demand forecasting and inventory management features help you optimize your stock levels, too, so that you’re not left with unsold goods but always have enough to meet the market’s appetite.

Improving Efficiency

This strategy will be critical for both businesses that produce finished products and manufacturers that act as suppliers of intermediate goods. Due to the higher costs for imported products, companies and end consumers alike will seek out more affordable options from domestic sources, who themselves will need to increase productivity to fulfill higher order volumes.

Automating routine processes with technology is one of the best ways to increase productivity and do more with the resources you have. Modern manufacturing ERP systems are designed to automate many tasks, and because they unify your entire organization’s data, you never have to spend time re-entering the data again.

And if you’re wondering how to improve manufacturing efficiency, specifically, you should consider overall equipment effectiveness (OEE) software, which allows you track production performance and identify losses in real time, as well as enterprise asset management (EAM) solutions, which enable you to implement a comprehensive predictive maintenance plan, assign and track work orders and manage your maintenance, repair and operations (MRO) inventory.

Bolster Your Business With Aptean Technology

The tale of the U.S.’s 2025 tariff plan is yet to be concluded, but at least for now there may be a semblance of stability and perhaps greater clarity. No sector is left untouched, and the impact will almost certainly be hugely significant. But what’s most important to you is that your company isn’t negatively affected by the situation.

That’s also very important to us. We’re proud to be a customer-first business, acting as a long-term partner for our clients, helping every step of the way from implementation project planning to ongoing support. And as part of that commitment, we’re building artificial intelligence (AI) into the core of our solutions, which will better equip our customers to automate processes, save money and succeed in dynamic markets.

Our latest offering, AppCentral, is a first-of-its-kind, all-in-one platform for enterprise technology. Designed to radically change how business software is consumed, it connects all your solutions—or “apps”—across a unified data lake and easy-to-use interface. It’s also entirely modular, so you can add another piece to your tech stack whenever you’re ready.

What comes of the tariffs, we can’t say for sure, but we do know that we’ll continue to serve our customers well, provide thought leadership and dedicate our resources to building the best technology we can. Turn to Aptean when you need a trusted partner in enterprise software.

Ready to learn more about any of our leading manufacturing solutions? Feel free to contact us or request a personalized demo.