Let’s face it – tariffs are giving manufacturers a major headache right now. With the recent administration change and trade tensions that don’t seem to be going anywhere, you can’t afford to just sit back and hope for the best. So what can you actually do about it? Here are five practical steps you should take right now to protect your business from tariff chaos.
1. Get Real About Your Supply Chain Vulnerabilities
You might think you know where your parts come from, but do you really? According to a 2023 McKinsey survey, 71% of manufacturing executives discovered hidden tariff vulnerabilities when they conducted thorough supply chain audits.
Most companies only have visibility into their tier-one suppliers, but tariff exposure often lurks several tiers deep in the supply chain. As CSG’s “Surviving the Economic Storm: Vol. 2” guide highlights, rising import costs for essential components are directly affecting production expenses across industries.
Roll up your sleeves and map out:
CSG recommends conducting a thorough cost analysis to determine tariff-sensitive areas in your production process. Our “Surviving the Economic Storm” guide suggests specific risk assessment strategies to evaluate your reliance on foreign suppliers and explore alternatives to mitigate tariff.
2. Don’t Put All Your Eggs in One Country’s Basket
Remember when everyone scrambled to find new suppliers during the early tariff waves? Don’t be that company this time around.
The manufacturers who weathered recent tariff shocks best weren’t necessarily those who immediately changed suppliers, but those who had options ready to activate. CSG’s guide specifically recommends “alternative sourcing” as a key strategy – exploring domestic suppliers or tariff-free trade partners to reduce your exposure.
What should be on your to-do list:
The Boston Consulting Group found that companies with diversified supplier networks across at least three geographic regions reduced their tariff exposure by up to 37% compared to single-region sourcing. CSG’s guide emphasizes that “diversification to mitigate risks” is essential – reducing reliance on a single supplier or region can protect you from sudden tariff shocks.
3. Get Smart About How Your Products Are Classified
Here’s something you might not know: sometimes just changing how your product is classified can save you serious tariff dollars – completely legally #NotLegalAdvice.
The U.S. Customs and Border Protection reported that in 2023, over $2.1 billion in unnecessary duties were paid due to incorrect or suboptimal tariff classifications.
Work with a good customs broker to:
Many manufacturers leave millions on the table by not optimizing their tariff engineering strategies. This aligns with CSG’s recommendation for “cost optimization” in their guide – identifying and eliminating inefficiencies within operations, including how you classify products for import purposes.
4. Upgrade Your Customs Tech Game
Are you still tracking tariffs on spreadsheets or relying on your customs broker to catch everything? That’s like trying to navigate rush-hour traffic with a paper map.
According to Gartner’s 2024 Supply Chain Technology Survey, companies using advanced trade management software reported 41% fewer tariff-related disruptions and saved an average of 7.3% on duties paid.
CSG’s guide specifically recommends “technology integration” as a key strategy for mitigating tariff disruptions. They advise using real-time tracking systems to monitor shipments and avoid delays – technology that can also help you manage tariff changes proactively.
What modern tariff tech can do for you:
This technology focus aligns perfectly with CSG’s emphasis on “data-driven decisions” as a crucial strategy for navigating tariffs. Their guide highlights how proper data can provide visibility into market trends and help anticipate price shifts caused by tariff changes.
5. Don’t Leave Free Money on the Table
Did you know the government might actually give you back some of those tariff dollars you’ve been paying? Seriously!
According to U.S. Customs and Border Protection, only 15% of eligible manufacturers fully utilize available duty drawback programs, leaving billions.
Look into:
This strategy connects directly to CSG’s recommendation to “allocate contingency funds for price spikes and delays” – but what if you could actually recover some of those funds? As their guide suggests, manufacturers need to pursue all available avenues to maintain healthy margins during tariff uncertainty.
Market Your Tariff Resilience as a Competitive Advantage
Here’s a bonus strategy straight from CSG’s playbook: turn your tariff preparedness into a marketing advantage. As your competitors struggle with price increases and supply disruptions, your tariff resilience becomes a powerful selling point.
CSG’s “Surviving the Economic Storm: Vol. 2” specifically highlights three marketing strategies that resonate in a tariff-affected economy:
The guide also notes an important trend: “Retail buyers are purchasing goods now to take advantage of 2024 prices before tariffs and inflation drive costs higher.” This creates an opportunity for manufacturers to close deals quickly, helping both parties stabilize against future uncertainty.
Smart ways to leverage this insight:
As CSG’s guide emphasizes, “The manufacturers that push forward rather than waiting to react will maintain a competitive edge.”
The Bottom Line
Listen, tariffs aren’t going away anytime soon. The World Trade Organization’s 2024 Trade Policy Review shows global tariff actions have increased by 23% year-over-year, the highest rate in a decade.
But here’s the good news: you’re not helpless. By taking these six practical steps, you’re not just playing defense – you’re turning tariff management into a competitive advantage in both operations and marketing.
The manufacturers who thrive won’t be the ones hoping for better trade policies. They’ll be the ones who’ve built tariff resilience into their business DNA. As CSG’s “Surviving the Economic Storm” guide concludes, economic uncertainty brings both challenges and opportunities. By implementing proactive strategies in sourcing, marketing, and operations, manufacturers can mitigate the effects of tariffs and remain competitive.
For a complete roadmap to not just surviving but thriving in this challenging environment, download CSG’s comprehensive “Surviving the Economic Storm” guides at https://solutions.chainstoreguide.com/surviving-the-economic-storm.
This article is part of CSG’s Tariff Economic Impact series, providing manufacturers with practical insights on navigating global trade challenges.
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