As U.S. manufacturers navigate the evolving landscape of global trade, one thing is clear: trade protectionism is here to stay. Recent rhetoric from both sides of the political aisle, alongside historical precedents, signals that tariffs and trade barriers will continue shaping the business environment. For companies looking to remain competitive, diversifying supply chains away from a single country, like China, is becoming increasingly essential.
Persistent Trade Protectionism
Trade protectionism has deep roots in U.S. policy, and the current political climate suggests it will only become more entrenched. Former President Donald Trump has floated the idea of imposing “universal baseline tariffs” of 10% on all imports, with potential tariffs of at least 60% on Chinese imports. Meanwhile, the Biden administration has maintained most of the tariffs implemented during Trump’s term.
This bipartisan embrace of protectionism reflects a broader trend where tariffs are wielded as a tool for economic control, particularly in key manufacturing states. The ongoing election campaign has made it clear that trade protectionism will continue influencing U.S. economic policies, regardless of who wins.
Unyielding Tariffs
Given the current political momentum, it’s clear that tariffs will remain a significant aspect of U.S. trade policy. Trump’s proposal to expand tariffs with a universal 10% levy on all imports, alongside targeted increases of up to 60% on Chinese goods, signals a potential escalation in trade barriers. On the other hand, Democratic leaders, including Vice President Kamala Harris, have shown little inclination to reverse the existing tariffs implemented during the previous administration.
This means U.S. businesses will likely face ongoing pressure from tariffs, making it essential for manufacturers to reassess their sourcing strategies and explore alternatives to mitigate these costs. As Chris Peterson, CEO of Newell Brands, noted in a recent interview, “It would be difficult to alter our supply chain in ‘real-time’ should tariffs rise dramatically on our products made in China.”
Diversification in Action
In response to growing trade tensions, many U.S. companies have already begun diversifying their supply chains. Harley-Davidson’s recent decision to shift more production to Thailand following retaliatory tariffs from the European Union is a clear example of how protectionist policies can push companies to relocate production. The EU imposed a 31% tariff on Harley-Davidson motorcycles made in the U.S., which significantly impacted the company’s global competitiveness, leading to a 15% drop in U.S. sales between 2017 and 2019 and another 20% decline since 2019.
Similarly, Newell Brands, the owner of Sharpie and Elmer’s Glue, has announced plans to reduce its dependence on China by moving some production to Southeast Asia. The company has already reduced its reliance on Chinese manufacturing from over one-third of its U.S. business five years ago to just 15% today, with plans to lower it further to below 10% by the end of the next year.
These moves underscore the urgency with which U.S. companies are responding to the shifting trade landscape. Diversification is not just about reducing costs—it’s about ensuring long-term stability in an increasingly uncertain global economy.
As a U.S.-based company with 30 years of experience, Source Machining Specialties specializes in helping U.S. manufacturers with their manufacturing needs in India. We’re so confident in our Indian production facilities that we invite you to a site audit at our expense. Discover more about our capabilities and services, and let’s start a conversation.
