Tariff Alert: Are You Ready for US Manufacturing?
Chief Research Officer Kevin O’Marah shares how supply chain and operations leaders can explain manufacturing plans and chart a path forward.
The global trade crisis continues to pound financial markets while operations leaders get grilled on how they’ll cope if triple-digit US tariffs are enforced. Press coverage focuses on short-term effects, like consumer prices and recession dangers, as though this is a temporary shock to be weathered.
President Donald Trump is teeing up negotiations and has been crystal clear that the long-term goal is increased manufacturing in the United States. Are you ready to explain your plans, especially if they could help win an exemption from the deal-maker-in-chief?
Write a One-Pager Explaining Your Manufacturing Plans
Country-level negotiations are starting with Korea, Japan, and Vietnam, among others engaging Washington. Markets looking for a floor seem to think everything will be fine once the deals start rolling in, but does this help Trump declare victory to voters still angry about deindustrialization in America’s heartland? Plus, at a higher level, when will the world economy stop relying on low-cost manufacturing labor halfway around the world to earn a sustainable profit?
Maybe this is the perfect time to map out what it would take to shift significant production volumes to the US. It would help calm investors’ nerves, assure supply chain partners that there is a path forward, and maybe come in handy when lobbying the United States Trade Representative Jamieson Greer for a break.
Here are three considerations to cover in a one-pager explaining your plans for US manufacturing:
- Harness Fast Changing Automation Technologies – Robotics and automation are advancing fast, with genAI training techniques allowing multi-purpose machines to execute complex work. Humanoids may be unrealistic for a while yet, but collaborative robots capable of fleet learning are a real possibility soon. The jump in labor productivity will be massive, allowing much richer job offers.
One immediate problem is that much of the world’s most advanced automation is operational in China and a risky bet in a trade war. Now is the time to engage vendors based in other countries like Germany, Korea, and the US to see whether commitments to co-develop machinery and digital control systems could help them scale US operations more quickly.
To do: Draft a timeline for future automation investments with an emphasis on building strategic partnerships with selected robotics vendors. - Repair Bridgeable Talent Gaps – Digital manufacturing skills are sorely lacking in the US, especially when compared to many countries in Asia. Zero100 data points to a 4x gap in digital skills for production and supply chain employees in the US as compared to India, Southeast Asia, and China.
Techniques for building human-machine teams go beyond simply hiring the right skills. Zero100 research on best practices for upskilling manufacturing roles point to designing automation with people at the center while re-imagining the process at a systems level. Manufacturing in the US going forward is about building careers, not just adding jobs.
To do: Devise manufacturing career paths that start at the operator level and develop through software programming, industrial engineering, and capital planning. - Address Underwhelming Material and Intermediate Suppliers – Apple’s famously interconnected supply chain in China runs many tiers deep. Its most recent supplier list identifies direct spend in all input categories for its products. Even as the company shifts volumes to India, it still lists 158 material and intermediate inputs produced in mainland China. Of those, 56 are exclusively sourced in China. Only 36 are sourced from rest-of-world without reliance on China.
Like Detroit in the 1950s, this kind of supplier concentration drives a flywheel of efficiency and innovation. Factories work best when inbound materials management is engineered to optimize outbound production. It is a business imperative above all because capital commitments upstream (think petrochemical refineries or semiconductor fabs) require very long-horizon visibility to volume demands
To do: Identify the essential anchors in your potential US supplier network and draft a pitch to help them justify incremental investment discussions.
Offer a Vision
The challenges to a revival of US manufacturing are so complicated that most discussion stalls before painting a picture of what could be. Supply chain leadership in 2025 is about seeing past the naysayers to offer a practical, multi-year plan to quit relying on low-cost labor manufacturing strategies.
Why not start with the US?
Zero100 has launched a give-to-get data collection effort to benchmark the use of robots in supply chain. If you're interested, click here to complete our three-question survey on robot density and automation spending — all participants will have access to the full data set and a report on our findings.
Zero100 Members: Keep an eye out for a members-only live huddle next week on tariff strategies for CSCOs and COOs.