Executive search firm Stiles Associates released a new manufacturing survey that highlights the impact of the recently implemented tariffs on manufacturers operating in the U.S., Canada, China and Mexico.
The survey featured more than 100 senior manufacturing executives, 84% of which manufacture in the U.S. Nearly 30% of respondents indicated they manufacture outside of the U.S., equally spread between Mexico, China and Canada.
The findings revealed that that 80% reported increased production costs due to the tariffs. Among them, 41% cited significant cost increases, while 39% referenced moderate increases.
A range of counter actions
The top three responses include passing costs on to customers (70%), diversifying their supply base (52%) and improving efficiency (40%). A little less than one-third plan on increasing U.S. domestic production.
“The data clearly anticipates that cost increases will be passed on to the customer in most cases,” Stiles Associates CEO Jake Stiles said. “While the rate of that increase may be tempered by improvements in efficiency and supply chain strategies.”
Adjustment strategies reported by the survey feature:
- Pass on changing costs to customers – 70%
- Diversify suppliers – 52%
- Increase efficiency – 40%
- Increase domestic production – 32%
- Manufacture in countries not impacted by tariffs – 29%
- Reduce Workforce – 17%
- No planned changes – 8%
Performance improvements are also in focus, with 58% of respondents planning to increase lean strategies and tactics to counteract rising expenses.
Long-term outlook
They survey also revealed uncertainty among manufacturing executives regarding the tariffs’ long-term impact on U.S. manufacturing competitiveness: 42% believe tariffs will increase competitiveness, 39% said decrease and 19% do not anticipate a significant change.
“These results confirm that manufacturers are adapting to the new trade landscape, but not without significant challenges,” Stiles said. “Supply chain resilience, cost management and operational efficiency are now top priorities for manufacturing leaders.”