Tariffs, Trade Wars & Manufacturing: What Small Shops Need to Know in 2025

The manufacturing world is once again facing seismic shifts. This time, due to a new wave of U.S. tariffs and the broader implications of ongoing trade tensions. As of 2025, the Biden administration has reimposed 25% tariffs on steel and aluminum imports, and President Trump has announced sweeping universal import tariffs effective April 5. These actions, combined with increasing global friction, are significantly reshaping the landscape for manufacturers.

For small and mid-sized manufacturers, these changes are more than political headlines. They directly impact material costs, supply chains, and production planning. At Mills Machine Works, we know firsthand how external factors like these ripple through the shop floor. Here’s what small shops need to understand and how to stay resilient.

What’s Changed in 2025?

🔹 A 25% tariff on all steel and aluminum imports is now in place, with previous country-specific exemptions eliminated. This includes derivative products such as auto and airplane parts.
🔹 A 10% universal tariff on all imports was declared in April 2025, with higher "reciprocal" tariffs targeting goods from 60 countries.
🔹 Tariffs now extend to electric vehicles, semiconductors, solar panels, and various technologies from China.
🔹 Trade retaliation and ongoing geopolitical tensions are leading to further disruptions and uncertainty across global supply chains.

These tariffs are part of a broader “Made in America” initiative aimed at reshoring production and reducing reliance on foreign suppliers—but they come with significant short-term costs and operational challenges.

How This Affects Small Manufacturers

📈 Rising Material Costs: Steel, aluminum, and essential components are significantly more expensive. Small shops, which often lack bulk purchasing power, are hit hardest.

🚚 Supply Chain Disruptions: The end of tariff exemptions has made even specialized materials harder to source affordably. Delays and price hikes are straining lead times and production schedules.

📉 Pricing Pressure: Shops must choose between absorbing these costs or passing them on. This often leads to tough conversations with customers and pressure on already thin margins.

Strategies for Navigating Tariff Turbulence

✅ Diversify Suppliers – Explore domestic and near-shore sources to reduce dependency on volatile international suppliers.

✅ Review Contracts & Pricing Models – Include clauses that allow for pricing adjustments tied to material cost fluctuations.

✅ Invest in Lean Manufacturing – Reduce waste and increase operational efficiency to make every dollar stretch further.

✅ Stay Informed – Monitor changes in trade policy and consult with suppliers who can provide forward-looking insights.

✅ Emphasize Value Over Price – Reinforce your shop’s strengths—precision, reliability, and customer service. These traits often outweigh minor pricing differences.

Final Thoughts: Pressure Brings Opportunity

While tariffs present real challenges, they also create unique opportunities for domestic manufacturers. OEMs are actively seeking U.S.-based partners to help stabilize supply chains and protect against global disruptions.

At Mills Machine Works, we’re embracing this moment to forge stronger relationships, streamline production, and demonstrate the power of small shops to deliver big results. In this era of uncertainty, adaptability and service are more valuable than ever.

📩 Looking for a domestic precision machining partner who understands the current challenges? Contact Mills Machine Works today. Let’s navigate the future together.