2025 Manufacturing Tariffs: Strategies for American-Based Companies

2025 manufacturing tariffs reshape cost structures and catalyze a decisive wave of reshoring. For producers in the United States, policy volatility translates into opportunity. For one, the rise in domestic production contributes to shorter lead times.

Due to the U.S. focus, it also emphasizes stricter compliance. For our American clientele, this enables far closer collaboration. While the headlines promote risk, SI Jacobson Manufacturing channels those into margin, speed, and resilience. This is especially true for soft goods, components, and finished consumer products.

How 2025 Manufacturing Tariffs Fuel the Reshoring Imperative

After a year of sweeping actions, companies face difficulties when it comes to long-range planning. Over the past eight months, the economy has seen the implementation of reciprocal duties, Section 232 sectoral surcharges, stacking rules, and evolving exemptions, among other recent changes.

Yet this same uncertainty actually accelerates domestic investment in American production. Manufacturers are pivoting to “right-shoring” to reduce tariff exposure, stabilize landed costs, and unlock operational benefits. For our customers, this entails shorter cycles, stricter quality control, and enhanced IP protection.

Moreover, domestic production also mitigates forced labor, UFLPA, and transshipment risks that derail global sourcing. Even with litigation over IEEPA authorities and deal-by-deal carve-outs, the directional signal is clear; the new baseline consists of elevated, persistent duties.

On the heels of trade frictions, independent macroeconomic modeling shows manufacturing expansion throughout the U.S. Meanwhile, non-tradable sectors bare more pressure for adjustment. For leadership teams, the strategic thought process no longer revolves around whether they should pivot to American-based manufacturing, but which areas they should tackle first. For companies with numerous SKUs, assemblies, and finishing steps, the priorities depend on maximizing tariff relief and creating customer value.

As a piece of guidance, companies should start with products that are tariff-dense, delay-sensitive, or compliance-exposed. Over time, these companies can then layer in plays like U.S. final assembly, pack-and-ship, or regional kitting. As a result, brands regain control over their total cost of ownership (TCO) while improving the level of service. In short, the 2025 manufacturing tariffs spawned a durable U.S. manufacturing upswing, one that favors agile domestic partners prepared to scale fast.

2025 Manufacturing Tariffs on Soft Goods and the Customer Squeeze

Few categories feel the pinch like apparel, textiles, and leather. Soft goods tariffs lead to a sharp increase in sticker prices in the short term. Furthermore, these tariffs keep the cost of soft goods elevated over time. In turn, tariffs compress retailer margins and strain promotions.

When we add in further scrutiny on Vietnam-centric transshipment, rules-of-origin complexity, and quota-like sectoral probes, this combination mounts obstacles for soft goods at virtually every single checkpoint.

On a positive note, the pressure creates ample white space for soft goods manufacturing in the U.S. Notably, this proves true where speed-to-shelf, nimble size runs, and compliant labeling are crucial. Domestic cut-and-sew, embellishment, and finishing slash lead times from months to weeks, smooth replenishment, and reduce chargebacks tied to late or non-compliant deliveries. Brands also gain ESG and traceability benefits that resonate with buyers and procurement teams.

From a practical standpoint, companies should map HTS codes to duty intensity and substitutability. Target high-tariff SKUs for rapid domestic pilots; reserve complex, low-elasticity basics for phased transitions or nearshoring under USMCA when rules-of-origin pencil out. Companies like SI Jacobson have dual-source capability. This enables our team to adjust production for our clients’ American-first and/or global needs.

Re-bid incumbent offshore suppliers; tariff-exposed factories often discount to defend share, giving you negotiating leverage. The upshot: soft good tariffs widen the total cost gap in favor of fast, compliant U.S. production. Your customers will feel the difference.

Cash-Flow Plays and Compliance for Manufacturing Import Tariffs

Policy is one lever; financial engineering is another. To cushion working capital and reduce exposure to manufacturing import tariffs, deploy a proven toolkit. Use the first-sale method for export to peg the dutiable value to the prior bona fide sale. This tactic lowers assessed duties.

Capture duty drawback when exporting goods and articles made from imported inputs. Facilities see up to a 99% refund.

Unbundle costs so non-dutiable charges (international freight, insurance, certain royalties) aren’t swept into customs value. Launch foreign trade zones (FTZs) to defer duties and reduce entry fees. Plus, consider zone-to-zone transfers for multi-site networks.

For companies that transact with affiliates, establish a pre-determined “objective formula” for downward transfer pricing adjustments. This positions your business to pursue duty refunds rather than only paying on upward adjustments. In parallel, implement reasonable care measures, such as classification, origin, and valuation controls; broker SOPs; and a post-entry review cadence (including post-summary corrections).

Prioritize Sector Hot Spots and Trade Deals

Not all tariffs bite equally. Sectoral surcharges raise BOM costs and ripple into machinery, fixtures, and packaging. Examples include steel/aluminum (often 50%), copper (around 50%), and autos/parts. Country deals can ease the edge on select lines (e.g., MFN reversion for PTAAP-eligible products), but carve-outs are patchy and time-bound. Assume the effective rate settles in the mid-to-high teens and build scenarios around 15%, 20%, and 25% to stress-test pricing and sourcing.

Prioritize three waves:

1. Wave 1 involves shift finishing, kitting, labeling, and repair at U.S. sites to capture immediate tariff and service benefits with minimal capital expenditure.

2. Wave 2 prioritizes reshoring high-duty, high-variability SKUs, where design changes and demand volatility make long supply lines vulnerable. This wave also includes automation as an offset to labor costs.

3. Wave 3 focuses on restructuring upstream inputs (i.e., yarn, dyes, trims, foams, and metals) through allied suppliers or domestic substitutes to stabilize BOMs.

From soft good manufacturing to rapid U.S. prototyping, compliant labeling, and pack-and-ship, our Illinois-based manufacturing facility turns tariff volatility into speed, quality, and certainty. Let’s map your HTS exposure and establish domestic production quickly. To mitigate risk in your supply chain, partner with SI Jacobson Manufacturing for U.S.-based production.