Report Provides Supply Chain Strategies to Deal with New Industrial Policies

Following a period of growth, the U.S. manufacturing industry is now facing a new wave of change ushered by policies that could bring additional disruption to an already turbulent supply chain. Deloitte’s report “Prioritizing Supply Chain Resilience and Agility: Strategies for US Manufacturing in a New Era of Industrial Policy,” examines the impact of the current market on manufacturing companies in the U.S., and identifies a three-pronged strategy for companies looking to adapt.

Key findings include:

• US manufacturing has been navigating significant growth and an already volatile supply chain. According to Deloitte’s analysis, U.S. manufacturing establishments grew by 40% between 2013 and 2024, while manufacturing construction spending increased by $181 billion in the same time period. Amid that growth, many CEOs (71%) already have plans to alter their supply chains over the next 3 to 5 years, according to Deloitte’s report.
• A focus on domestic manufacturing adds supply chain uncertainty. Incentivizing domestic manufacturing seems to be a centerpiece of the Trump administration’s policy priorities, which could impact supply chain strategies. 56% of respondents to a recent survey cited trade uncertainties, including tariffs and negotiations, as their top business challenge, up from 36% the quarter before.
• Tariffs on products from top trade partners are set to have the biggest impact. Deloitte analysis from the International Trade Administration found that in 2023, Mexico surpassed China as the leading US import partner for manufactured goods, followed by China and Canada. Motor vehicles are the top imports from Mexico and Canada, Deloitte found, while communications equipment tops China imports.
• Changes impacting domestic supply chains could shape domestic manufacturing strategies. Deloitte’s analysis found that the top 10 largest employing U.S. manufacturing subsectors produced nearly 1.5 times more output per production worker compared to the remaining six subsectors in 2023—which could be significantly affected by tariffs on imported steel and aluminum.
• To position for growth despite volatility, manufacturers can leverage a three-pronged approach. Deloitte recommends companies assess supply chain exposure and risk, consider near-term tariff mitigation approaches, then explore longer-term strategies to minimize cost and empathize resilience to strongly navigate the uncertainties ahead.

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