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A steady drumbeat of tariffs, changing trade policy and an overall environment of uncertainty are leading many manufacturers to take a “wait and see” approach to investment and expansion. Companies are reassessing spending plans, finding it challenging to adjust how they do business on the fly in response to unsettled trade policies.
Manufacturers have seen the effects in the cost of raw materials, which has led customers with long-term pricing agreements to push back. Some are finding they need to negotiate changes to contract terms, while others are faced with locating new supply sources. However, these are difficult changes to make, and companies are unsure whether to push forward as uncertainty over tariff amounts, origin, timing and related retaliation persists.
As a result, manufacturers are hesitant to commit to large investments or expansion plans unless they can be certain they’ll see a long-term payoff. Whether manufacturers need to change their supply chain strategy, find alternative sourcing or re-source materials, they don’t feel confident implementing these initiatives without more evidence of stability in trade policy.