How Tariffs Impact American Manufacturing—and How Shops Can Prepare
American Manufacturing will be impacted by Tariffs, let’s explore the details:
The Growing Impact of Tariffs on American Manufacturers
Over the last five years, manufacturers have faced unprecedented challenges: a global pandemic, supply chain breakdowns, inflation, and now tariffs on imports and raw materials. What do tariffs really mean for American manufacturing—and how can machine shops prepare?
- Tariffs are changing cost structures across the manufacturing supply chain.
- Globalized sourcing means inputs are affected, not just finished goods.
- Efficient, tech-enabled shops are positioned to win reshored work.
What Are Tariffs and Why Do They Matter to American Manufactures?
Tariffs are government-imposed taxes on imports or exports. Historically, they made domestic products more competitive and supported Made in USA manufacturing. In today’s global economy, nearly every finished product depends on parts sourced worldwide, so tariffs now impact raw materials, small components, and even energy.
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Real-World Examples
- 2018 washing machine tariffs: Led to major U.S. investments and job creation—while increasing consumer prices.
- 1980s Japanese auto tariffs: Reduced the trade deficit and boosted local manufacturing—again with higher end-product prices.
Takeaway: Tariffs can strengthen domestic manufacturing, but they often raise production and consumer costs.
What Today’s Tariffs Mean for Machine Shops
Unlike earlier policies focused on finished goods, current tariffs increasingly target inputs that shops rely on every day. That can mean:
- 20–30% cost increases for tools, raw materials, and potentially energy.
- Pressure on inefficient operations that can’t absorb rising costs.
- Opportunity for lean, well-prepared shops to capture reshored work.
How Machine Shops Can Prepare
1) Control Costs Internally
- Reduce energy use: optimize CNC run times and off-peak scheduling.
- Refine setup workflows to reduce unnecessary setbacks
- Manage tooling: track wear, standardize, and adopt toolpath strategies that extend life.
- Cut scrap: prevent collisions and tolerance errors with simulation and verification.
2) Capture New Opportunities
- Be ready to produce parts previously imported from overseas.
- Train teams on advanced strategies and leverage modern CAD-CAM software.
- Invest in digital marketing so buyers can find your capabilities.
3) Stay Flexible
- Challenge “we’ve always done it this way.”
- Modernize workflow to improve throughput and quoting speed.
- Adopt technology that reduces setup, cycle time, and rework.
FAQs: Tariffs & U.S. Manufacturing
What are tariffs in manufacturing?
Tariffs are taxes on imported or exported goods. In manufacturing, they influence sourcing, pricing, and investment decisions across the supply chain.
How do tariffs affect U.S. machine shops?
Tariffs on inputs like metals, tooling, and components can raise operating costs by 20–30%, pushing shops to improve efficiency or pass on costs.
How can shops prepare?
Optimize energy and cycle times, reduce scrap, manage tooling, upskill teams, and modernize software and processes to stay competitive.
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