Trump Tariffs Won’t Bring Supply Chains Back to the U.S., CNBC Reports
The supply chain survey report reveals that companies will adopt low-tariff, globe-hopping strategies.
Suppose President Donald Trump’s tariffs lead to a shift in manufacturing away from China. According to a recent CNBC Supply Chain Survey, the United States manufacturing sector won’t be the primary beneficiary in that case.
While the Trump administration forecasts a surge in reshoring, the survey shows that many companies believe bringing supply chains back to the country could significantly increase their costs. Instead, most plan to seek out low-tariff regions globally to maintain cost efficiency.
The survey found that 57% of respondents identified cost as the primary barrier to relocating supply chains to the United States, while 21% pointed to the challenge of securing skilled labour. Despite the Trump administration’s promise of tax incentives for reshoring, only 14% of participants considered taxes the main factor in their decision to relocate manufacturing back home.
While cost continues to be the major obstacle for companies considering reshoring, President Trump has made a significant promise to exempt the tech sector from new tariffs imposed on manufacturing countries worldwide, with a particular focus on China. This move is aimed at alleviating the financial strain on technology companies that rely heavily on global supply chains and Chinese manufacturing. By shielding the tech sector from these tariffs, the administration hopes to encourage continued innovation and competitiveness within the industry.
Overall, the majority of respondents estimated that the cost of establishing a new domestic supply chain would be around double (18%) or more than double (47%) current expenses. Rather than relocating supply chains back to the United States, 61% of respondents believe it would be more cost-effective to move them to countries with lower tariffs.
In addition to tariffs, key concerns impacting supply chains included consumer demand, raw material prices, and the ‘current administration’s inability to provide a consistent strategy.
A majority of respondents (61%) who were asked whether they believe the Trump administration is “bullying corporate America” answered with a resounding “Yes.”
Recession Warning from the Supply Chain
Sixty-three percent of respondents are warning that Trump’s tariff policy could lead to a recession in the U.S. economy this year, with roughly half (51%) expecting a consumer pullback to take effect in Q2.
“Supply chains that support millions of U.S. jobs, power U.S. manufacturers, and provide affordable choices for U.S. consumers are now experiencing early signs of damage due to these destructive tariffs,” said Steve Lamar, CEO of the American Apparel & Footwear Association. “Higher prices, job losses, product shortages, and bankruptcies will be only some of the adversity the U.S. economy weathers while the President pursues this ill-advised tariff policy.”
Kevin Hassett, Director of Trump’s National Economic Council, claimed that more than 10 countries have presented the United States with “remarkable” trade deal offers. He also expressed complete confidence, stating that he is “100%” certain the country will not face a recession.
