Manufacturers need to set up alternate suppliers, add chain supply, flex contracts to mitigate tariffs, experts say

Manufacturers need to make adjustments now in the face of President Donald Trump’s newly-announced 25% tariffs on all steel and aluminum imports, according to Manufacturing Dive.

The tariffs, which currently do not include any exemptions or product exclusions, could drive up operational and supply costs for manufacturers that rely on steel inputs, according to Greg Husisian, chair of the international trade and national security practice at Foley & Lardner.

Indiana, with its manufacturing-heavy economy, could especially be at risk, according to Michael Hicks, professor of economics and director of the Center for Business and Economic Research at Ball State University, speaking to the Indiana Business Journal.

“If we’re not the most at-risk state, we’re one of the three most at-risk states because of tariffs,” Hicks said. “The reason for this is, we import a very large share of our manufacturing production that goes into finished products that leave the state.”

Stats to know:

• Finished steel imports made up approximately 23% of the commodity’s consumption last year, according to the American Iron & Steel Institute.
• Prices for scrap metal are up 10% so far this month, according to CFO Isaac Dietrich.
• The Association of Equipment Manufacturers said in a statement it was “alarmed” by the tariffs that it says are likely to disrupt supply chains, drive up equipment production costs by up to 7% and threaten jobs.

To read the full Manufacturing Dive article click here.