While the US has paused tariffs on Canada and Mexico (for now), they remain in place for China, creating significant challenges for manufacturers. The impact can be substantial: a survey by Canadian Manufacturers & Exporters (CME) reveals that nearly nine in ten Canadian manufacturers would face significant or very severe impacts on their business if the U.S. imposes tariffs on Canadian imports.
While many companies are absorbing costs or making reactive changes, industry leaders are turning these challenges into opportunities for strategic transformation.
In this article, we’ll take a closer look at practical strategies for manufacturers to adapt and thrive in today's complex trade environment, focusing on proven approaches that balance cost management with long-term resilience.
With the volatility in today's trade environment, many manufacturers are realizing they may no longer be able to rely on a single-country manufacturing strategy. The most proactive are already exploring manufacturing locations and partnerships to build resilience against trade policy shifts and rising costs.
While China remains the world's factory floor, additional tariffs and increasing costs have fundamentally changed the equation. Many of our clients are discovering that other Asian manufacturing hubs can now offer compelling alternatives. Let's examine two regions that have emerged as viable alternatives:
Vietnam has emerged as a compelling alternative, though the decision to manufacture there requires careful consideration.
Advantages to manufacturing in Vietnam:
Challenges:
The key to success in Vietnam may lie in a hybrid approach. By combining partial production in China with final assembly in Vietnam, manufacturers can meet "Made in Vietnam" requirements while maintaining cost efficiency. This strategy, while more complex than single-country production, may reduce costs compared to facing full tariffs on Chinese production.
While Taiwan has been at the forefront of manufacturing for decades, new tariffs on Chinese production make it an increasingly attractive alternative.
Advantages to manufacturing in Taiwan:
Challenges:
When manufacturers consider relocating production to avoid tariffs, they often think about moving their entire operation. However, this all-or-nothing approach isn't always necessary or cost-effective. By breaking down your products into individual components, you can make more strategic decisions about what to move and where—you might also find that some are better kept at their current location.
To start, examine your product's components, asking key questions about each category:
For plastic injection-molded parts:
For electronic assemblies:
For raw materials and basic components:
While tariffs create immediate cost pressures, they also present an opportunity to build a more resilient supply chain. In fact, forward-thinking manufacturers are taking the opportunity to develop supply chain strategies that can adapt to future trade policy shifts.
The goal isn't just reducing costs—it's creating an agile supply chain that maintains efficiency and quality even as trade policies change. As you explore manufacturing alternatives, consider these key questions:
Assessing production locations
Managing production transitions
Preparing for future changes
As tariffs reshape global trade, manufacturers need expert guidance to adapt their operations effectively. While these challenges are significant, partnering with an experienced manufacturing consultant can help you navigate them and uncover new opportunities.
Working with Kingstec, for example, provides several key advantages:
Ready to explore your options? Contact Kingstec today to discuss how we can help you optimize your manufacturing strategy.
