US Tariffs: What’s at stake for the manufacturing industry, and what strategies can help navigate the shift?

The new US tariff measures are shaking up the manufacturing industry, driving up costs and placing greater pressure on supply chains. In this context, companies must adapt their strategies to mitigate risks and remain competitive. Let’s break down the key challenges and possible solutions.

Rising US tariffs are directly impacting manufacturing companies, especially in critical sectors such as automotive, metallurgy, and electronics. These cost increases are squeezing margins, complicating logistics networks, and requiring swift adjustments to sourcing strategies. Given these developments, how can manufacturers prepare and limit the impact on their operations?

A disruption in supply chains and costs

The new tariff measures are increasing the cost of access to essential raw materials and components—such as lumber, petroleum and chemical products, minerals and metals, and agricultural goods. As a result, Procurement and Supply Chain departments are being forced to rethink their strategies to maintain competitiveness.

Rising sourcing costs are reducing company margins and directly affecting final product pricing. At the same time, logistics flows are being disrupted, forcing manufacturers to rethink their supply routes and adjust inventory levels. On top of that, regulatory uncertainty looms large: tariff conditions can change quickly, and retaliatory trade actions cannot be ruled out.

In this context, it’s essential for manufacturers to implement tailored strategies to minimize risks and ensure business continuity.

 

Strategies to limit impact and secure supply

To address these challenges, manufacturing companies must act quickly by activating several strategic levers. Supplier diversification is a key approach: by exploring alternatives outside the affected regions—such as Canada, Mexico, or Europe—companies can reduce their dependence on tariff-heavy imports.

Renegotiating contracts is another critical lever. This includes integrating tariff adjustment clauses and clarifying how increased costs are shared between parties. Similarly, sourcing optimization can favor shorter supply chains and local suppliers, helping to bypass certain restrictions and better control costs.

Logistics adaptation also plays a major role. Revising transportation routes, adjusting inventory levels, and rethinking distribution networks can help offset the cost impact of new tariffs. Finally, proactive regulatory monitoring is essential to anticipate future changes and quickly realign sourcing strategies.

In such a volatile context, expert support can make all the difference. KLB brings its expertise to manufacturers by helping them adapt their procurement and supply chain strategies.

“Our teams support clients with contract optimization, supplier management, and the implementation of commercial and regulatory risk mitigation plans. With this expertise, manufacturing companies can secure their supply chains and protect their competitiveness,” says Pascal PERRON, Vice President of Consulting at KLB Canada.

Anticipate to stay competitive

In an uncertain economic environment, adapting procurement and supply chain strategies is essential to minimize risk and preserve profitability. Preparing today means staying competitive tomorrow.

_ Ons BEN NARS, Senior Manager, Supply Chain Consulting at KLB Canada..

Need support navigating these challenges? KLB’s experts are available to assess the impact on your business and optimize your sourcing strategies. Contact us for a personalized consultation!