Bailey Schulz, USA TODAY
7 min read
New York-based manufacturer Gear Motions purchases the majority of its parts from U.S. suppliers, with roughly 4% of inputs imported from other countries.
It’s a small fraction, but with a 10% base tariff in effect since early April, President and CEO Dean Burrows said his company, which specializes in custom cut and ground gears, will have to pass down those price increases to customers. That’s not for lack of trying to find new suppliers.
“We have not been able to find a U.S. source that can make the product, and we have searched globally,” Burrows said.
Tariffs are meant to fix that, with the Trump administration aiming to “reverse the decades of globalization that has decimated our industrial base,” according to an April White House press release.
But reviving the U.S. manufacturing base would take years, and economists have doubts that President Donald Trump’s tariffs will be enough to bring it back to its former glory. Meanwhile, many U.S. manufacturers that rely on imports may be more likely to pass on tariff costs to consumers than reshore their supply chains.
Nearly one-third of U.S. manufacturers’ intermediate inputs are imported from other countries, according to a 2022 report from the Commerce Department.
“In the short run, it’s going to hurt manufacturers. It’s going to hurt the factory owners. It’s going to hurt the workers,” said Nancy Qian, an economics professor at Northwestern’s Kellogg School of Management. “And that's on top of the pain the workers will feel when they go to the store and need to pay more for their imported (items).”
Trump’s tariffs are meant to position the U.S. as a “global superpower in manufacturing” by drawing in new factories and manufacturing investments.
“The president has said early and often that the best way to avoid tariffs is to just come here and produce," Trump's top trade adviser, Peter Navarro, told CNBC in early April. “We're going to get to a place where America makes stuff again.”
But moving supply chains to the U.S. can be costly.
Nearly two-thirds of 380 surveyed companies say building a new domestic supply chain would at least double their current costs, according to an April CNBC survey. Sixty-one percent said it would be more cost-effective to relocate to a lower-tariffed country.
“If the U.S. continues its focus on China, it will be successful in moving production out of China to some extent, but it won’t move so much of it back to the U.S.,” Qian said. “There are many other countries out there that can manufacture at costs lower than the U.S.”
