The Penn Wharton Budget Model estimates that U.S. businesses—many of them small to mid-sized manufacturers—will pay over $5.2 trillion in tariffs over the next decade under the latest trade policy shifts. For smaller manufacturers sourcing critical components from abroad, this isn’t just a macroeconomic headline—it’s a direct hit to the bottom line. Every dollar spent on higher import taxes is a dollar that can’t be reinvested in equipment upgrades, hiring skilled labor, product development, or expanding operations. As these costs trickle down, they drive up pricing, potentially eroding competitiveness in both domestic and international markets.
As the ripple effects of tariffs on Chinese imports continue to disrupt component availability and pricing, smaller manufacturers face a critical crossroads. Now is the time to evaluate alternative sourcing strategies—whether that means reshoring key inputs, partnering with domestic suppliers, or exploring new vendor relationships in countries with lower tariffs. The businesses that plan and pivot now will be in the strongest position to protect margins and maintain customer trust in a volatile trade environment. Waiting could mean falling behind.
Should we double down on domestic suppliers—or shift sourcing to lower-tariff countries?
On the one hand, supporting American-made products can reduce exposure to trade risks, strengthen local partnerships, and expedite lead times. On the other hand, some U.S. components aren’t available or cost-effective. That’s where sourcing from countries other than China becomes a viable and often strategic alternative.
This article explores both paths and introduces two practical guides to help you take action—whichever route you choose.
Option 1: Buy (and Promote) American
Re-shoring has never had more momentum. From furniture to semiconductors, an increasing number of companies are seeking to establish domestic partnerships.
Pros:
- Avoid significant tariff increases
- Reduces dependency on complex global shipping
- Faster turnaround and fewer customs delays
- Promotes domestic job creation and resiliency
- Can be a brand differentiator (“Made in USA” carries weight)
Cons:
- Higher labor and material costs
- Limited availability in some product categories
- Discovery can be difficult: many U.S. manufacturers aren’t visible in search
Learn how to find U.S. suppliers or improve your visibility if you are one:
Read: Search Smarter, Source Smarter – How to Navigate Tariffs with U.S. Suppliers
Option 2: Source From Lower-Tariff Markets
For components or goods that are not viable for domestic production, many businesses are shifting their production from China to countries such as Vietnam, India, and Mexico.
Pros:
- Cost-effective alternatives without the tariff hit
- Many operate under favorable U.S. trade agreements (e.g., USMCA, CPTPP)
- Suppliers are often well-equipped to scale and export
Cons:
- Risk of quality control issues
- Slower shipping and potential for geopolitical instability
- Language and regulatory complexity in new sourcing regions
- Learning curve of importing from a new market
Explore how to search smarter for alternatives—or attract U.S. buyers if you’re a supplier in a low tariff market:
Read: Beyond China – Building Supply Chains in Lower-Tariff Markets
What’s Right for You?
There’s no one-size-fits-all answer. The right approach depends on what you’re buying, your margins’ ability to absorb, and the level of resilience your supply chain requires.
But what is universal is Search friction is the hidden cost. Whether you’re buying or selling, domestically or globally, the companies that appear in search results and trade directories, speak clearly to their target audience, and align with new trade realities will prevail.
Ready to make search your competitive advantage?
Dive deeper into the playbooks for each strategy and take control of your post-tariff sourcing decisions.
