Tariffs, One Year Later: How Are US Manufacturers Doing?

To be honest, I tried to write this article a dozen times over the past year.

Every time there was a new tariff announcement, court ruling, or trade deal, it felt like the right time to weigh in. I’d start writing, but then things would change again. With all the policy shifts, counter-tariffs, and legal decisions, it was hard to find a steady point for analysis.

So I decided to wait. Wait until there was enough distance to see the full picture, or at least enough of a picture as this still-evolving situation would allow. A full year felt like the right benchmark. Long enough to see real consequences. Long enough to separate the signal from the noise.

A Year That Changed Every Market and Industry

What I heard during that year, through news reports and in conversations with manufacturers across the country, has been all over the board. Tight margins are being squeezed further from both directions. Supply chains that took a decade to build, suddenly needed to be rerouted in a matter of months. The gut-wrenching calculations of whether to absorb rising costs and protect customers, or pass on the costs and risk losing the customers. And underneath all of that, the responsibility to employees and their families.

On April 2, 2025, tariffs were raised on nearly every U.S. trading partner to historic highs not seen since 1909, sending markets tumbling immediately.¹ The reaction from the manufacturing community was immediate. Jay Timmons, President and CEO of the National Association of Manufacturers, captured it best on Liberation Day itself: ​“Many manufacturers in the United States already operate with thin margins. The high costs of new tariffs threaten investment, jobs, supply chains, and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.”

That quote hit home. Every manufacturer I talked to over the past year seemed to feel that reality firsthand.

One year later and things are still complicated. There have been real wins, serious setbacks, and the legal and policy landscape keeps changing. But the real discussion isn’t what happened in Washington or the courts: It’s what all this means for you, the people running manufacturing businesses, making payroll, and trying to compete in a world that’s changed unimaginably in just twelve months.

That’s what this article is here to cover. Let’s dive in.

The Year in Review: A Year of Whiplash

In the last twelve months, U.S. tariff policy changed over 50 times. It started April 2, 2025, with tariffs being raised to historic highs for almost every trading partner, only to be reversed a week later. 

After that, there were pauses, renegotiations, more escalations, and some tariffs were even struck down. The U.S. and China went through several rounds of escalation and truces, finally agreeing to a one-year reduction deal through November 2026. 

In February 2026, the Supreme Court ruled the IEEPA tariffs unconstitutional, leaving over 330,000 businesses waiting for $166 billion in refunds. The Administration quickly replaced those tariffs with a new 10% global tariff under a different law.² Through all of this, industries had to adapt on the fly. Here’s a look at who’s come out ahead, and who hasn’t.

Where Are We One Year Later?

Since things have changed almost every week, I’ll step back and look at where we actually stand now, in April 2026, a year after Liberation Day.

Hang On Tight: The Tariff Rate Roller Coaster

Tariff rates have changed a lot. From January to April 2025, the average U.S. tariff rate jumped from 2.5% to about 27%, the highest in over a hundred years. After more changes and legal decisions, it dropped to 13.7% by February 2026. That’s still more than five times higher than where we started. The cost has fallen directly on American businesses and consumers. 

These tariffs are the biggest domestic tax increase as a share of GDP since 1993, with the average cost passed on to businesses and consumers at about $1,500 per household in 2026.³ To be clear, it’s not foreign governments paying this bill, it’s your customers, your suppliers, and often your own business absorbing the costs.

What the Administration is Saying

So what does the Administration highlight as proof that their strategy is working? The numbers they share are real. The U.S. goods trade deficit (the gap between imports and exports) fell by 24% from April 2025 to February 2026 compared to the year before. 

There are also real achievements in manufacturing. For example, for the first time in over 25 years, the U.S. produced more crude steel than Japan, and manufacturing labor productivity saw its biggest yearly jump in fifteen years.⁴ 

Blue-collar wages rose by more than $1,400 on average in just one year, beating inflation. For domestic steel producers and manufacturers with operations based in the U.S., this year has truly been a win.

What the Critics Are Saying

But the critics point to a different set of numbers, which are equally hard to ignore. Manufacturing employment continued to decline after Liberation Day, falling by 89,000 jobs between April 2025 and February 2026. 

The reshoring boom that was promised as the payoff for all this disruption has been slow to materialize: Foreign direct investment into the U.S. totaled $288.4 billion in 2025, below the prior decade’s average and lower than each of the four prior years.⁵ And while companies have made a lot of noise about bringing production back to American soil, only 26% were actually planning or engaging in reshoring as of early 2026, with a majority saying it would take at least several years.

What We Are Seeing

At Top10ERP​.org, we’ve seen something that rarely makes the news: company size plays a huge role in the tariffs story. Larger manufacturers, while not immune, have had more ways to adapt. They often have the financial reserves to handle higher costs, the power to renegotiate with suppliers, and the logistics to shift sourcing quickly. Smaller manufacturers don’t have those advantages. 

When tariffs hit and margins are already tight, they can’t wait months to adjust. They have to make tough decisions about pricing, staffing, and survival, often with little information and no time to spare. The gap between large and small manufacturers’ experiences this year is one of the most important but least discussed parts of this story. (I’ll write more about this in a future article.)

Overall, if your manufacturing business benefits from reduced foreign competition or operates primarily with domestic inputs and labor, the past year has likely had some bright spots. However, if your business depends on imported materials, components, or finished goods, and most manufacturing businesses depend on at least some of those, it’s been a harder road.  As many have stated, winners and losers. 

Winners and Losers in Manufacturing & Distribution

Let me be clear here, the words ​“winners” and ​“losers” are relative terms in this environment. Even the companies that came out ahead did so in a landscape of incredible uncertainty, and many of the ​“wins” came with their own complications. 

With that said, the past year has drawn some fairly clear lines between industries and companies that benefited from the new tariff environment and those that got hurt. Here’s what the data, and the people running these businesses, are actually saying. You might even find the same industry on both the winner and loser lists. It’s pretty murky.

The Winners

Domestic Steel & Metals Producers

If there is one industry that can point to the past year as a genuine win, it’s domestic steel. The U.S. surpassed Japan in crude steel production for the first time in over 25 years, a direct result of the tariff program protecting domestic producers.⁶ For steel mills and metals manufacturers who spent years watching foreign competitors undercut their prices, this is the moment the policy was arguably designed to create.

Aluminum processor Constellium was candid about it on their Q3 2025 earnings call: ​“We continue to believe the current trade policies present a net positive opportunity for us.” That’s about as direct as corporate language gets.

Domestic Auto Assemblers — A Partial Win

The auto industry is a complicated story.  For manufacturers with a strong U.S.-based production footprint, the tariffs created a meaningful competitive advantage. Manufacturers with a U.S.-based production footprint gained a structural advantage that foreign brands could not quickly replicate. The response from international automakers was telling: Toyota, Nissan, and Honda all announced plans to increase domestic U.S. manufacturing to avoid tariff exposure.⁷ 

When your foreign competitors start building plants in your backyard to compete with you, that’s a signal that the policy is working for domestic producers. GM CFO Paul Jacobson offered a measured but cautiously optimistic read on their January 2026 earnings call: ​“We should end up at a position where our net tariffs are actually lower in 2026 than they were in 2025.”

U.S. Pharmaceutical Manufacturers — Playing the Long Game

Pharma is an interesting case because the wins here are largely forward-looking rather than already realized. The tariff environment (combined with the threat of even steeper pharmaceutical tariffs announced in April 2026) prompted a wave of major domestic manufacturing commitments.

AbbVie committed more than $10 billion to U.S. manufacturing over the next decade, including four new plants. Johnson & Johnson pledged more than $55 billion to build four domestic facilities.⁸ AbbVie CEO Robert Michael was measured but clear: ​“We are fairly insulated from any effects of the EU tariffs,” pointing to the fact that its best-selling drug Skyrizi is made in the U.S. and highlighting the company’s planned domestic expansion. These are long-term plays, but they represent exactly the kind of domestic investment the tariff policy was designed to incentivize. 

Domestic Manufacturers — The De Minimis Dividend

This one doesn’t get nearly enough attention, and I want to spend a moment on it because I hear about it constantly in conversations with smaller domestic manufacturers. 

For years, U.S. companies making physical goods have been competing against a flood of ultra-cheap products shipped directly from China to American consumers, completely duty-free, exploiting a loophole called the de minimis exemption. Platforms like Shein and Temu built billion-dollar businesses on it by shipping individual packages valued under $800 directly to your customers’ doors without paying a penny in tariffs, while you were paying duties, overhead, and living wages at every step of your operation. The closure of that loophole in May 2025 was, for many domestic manufacturers, the single most meaningful development of the entire tariff era. For the first time in years, those competitors had to play by the same rules.

The Losers

The Automotive Industry — Death by a Thousand Costs

The same industry that had partial winners also produced some of the most significant losses of the past year. And the numbers are staggering: Automakers absorbed more than $35 billion in tariff costs since the levies took effect, with the average vehicle price rising roughly 10% in 2025 and imported models seeing increases of $5,000 to $8,900. It wasn’t just the automakers themselves feeling the pain; heavy equipment manufacturers were hit hard, too. Caterpillar projected annual tariff costs of up to $1.75 billion, John Deere estimated an impact of $600 million, and Lockheed Martin reported $350 million in costs.⁹ These are enormous numbers, and they ripple down through every tier of the supply chain.

Consumer Packaged Goods & Retail

For consumer goods manufacturers, the past year has been a constant exercise in damage control. P&G CFO Andre Schulten didn’t mince words on a July 2025 earnings call: ​“At these rates, tariffs alone are a 5‑point headwind to core EPS growth in fiscal 2026.” P&G made one of the hardest decisions by raising prices on 25% of its products. For smaller consumer goods manufacturers without that kind of pricing power or brand loyalty, the options are even more limited. 

Dollar Tree CFO Stewart Glendinning captured the new normal for retailers: ​“While there may be some upside, we remain cautious because of the potential for further near-term changes and because of the potential for negative freight and other costs related to the conflict in the Middle East.“¹⁰ Caution has become the default setting.

Furniture & Home Goods

For import-dependent manufacturers, few industries tell the story more clearly than furniture and home goods. Flexsteel Industries CEO Derek Schmidt was direct about the reality his company faces: ​“Tariffs represent a major risk to both demand and margins… The margin risk from tariffs requires a multifaceted approach to mitigate, including supply chain adjustments, new cost savings initiatives, and limited pricing actions.“¹¹

That ​‘multifaceted approach’ is a polite way of saying there is no easy answer.  They are pulling every lever available and hoping it’s enough.

Agriculture & Food

For American farmers and food producers, the damage came not from U.S. tariffs on imports, but from foreign counter-tariffs shutting American products out of key export markets. The numbers here are jarring. U.S. soybean exports to China fell 78% through August 2025, and corn exports collapsed by 99%. Food prices rose 2.8% across all 2025 tariff actions, with fresh produce up 4%.¹² This is the other side of the tariff coin that often gets overlooked in the manufacturing conversation, when trading partners retaliate, it’s American exporters who pay the price.

Distribution & Importers

For the distribution industry, the past year has been a masterclass in cost absorption. Around 80 – 85% of tariff costs were absorbed domestically, either by corporations, consumers, or both, according to supply chain experts. Someone always pays, and in most cases, it has been American businesses and American consumers splitting the bill. 

The closure of the de minimis exemption also hit e‑commerce platforms and small importers hard. The same development that was a win for domestic manufacturers was a significant disruption for businesses built around importing and distributing lower-cost foreign goods.

A Special Case: Apparel & Fast Fashion

The apparel industry deserves its own mention here because it illustrates the tariff story in a way that is uniquely visible to everyday Americans. And it’s directly relevant to domestic manufacturers who have been competing on an unlevel playing field for years.

With roughly 98% of clothing sold in the U.S. imported from abroad, there was virtually no domestic manufacturing base to absorb the shock. The average applied tariff rate on apparel imports nearly doubled from 14.7% in January 2025 to 26.4% by October, with major brands reporting steep costs, like G‑III Apparel that faced $155 million in additional expenses, Victoria’s Secret projecting $100 million, and Tapestry absorbing $160 million.¹³

 Those are large company numbers. For smaller apparel manufacturers and importers, the proportional impact was often far more severe.

The De Minimis Closure: A Win That Many Missed

But here’s the part of the apparel story that I think matters most to the manufacturers reading this. As mentioned previously, for years, platforms like Shein and Temu built billion-dollar businesses by shipping individual packages directly from China to American consumers completely duty-free, exploiting the de minimis loophole. 

Forever 21 cited its inability to compete with foreign competitors’ lower prices in its bankruptcy filing, a direct casualty of that unlevel playing field. When the loophole closed in May 2025, the results were measurable almost immediately. Shein’s U.S. apparel sales declined 4.5% in 2025, its first market share drop since 2021.¹⁴ For domestic manufacturers who had been watching cheap foreign goods flood their market duty-free for years, that was a long-awaited and positive change.

Less Reshore, More Reshuffle

However, the hoped-for reshoring boom in apparel didn’t materialize as predicted. Most brands didn’t reshore; they simply reshuffled. Carter’s moved production to Vietnam, Cambodia, Bangladesh, and India. Abercrombie & Fitch drove China sourcing into the low single digits. Steve Madden reduced China-sourced U.S. imports from 71% in 2024 down to 30% for fall 2025.¹⁵ The supply chains moved, but they stayed overseas. U.S. domestic suppliers were often seen as lagging in product diversity, agility, flexibility, and vertical integration, the exact factors needed by companies navigating today’s uncertain trade environment.

Butterfly Effect Continues

A single tariff policy change triggered a complex domino effect that rippled across many industries, supply chains, and countries in ways impossible to fully predict and nearly impossible to fully prepare for. Steel wins, automotive struggles. Pharma invests long-term, agriculture loses export markets overnight. Domestic manufacturers finally get a level playing field, while distributors absorb costs they can’t fully pass on. The companies that survive have the resources and flexibility to adapt. The ones that struggle are simply caught in the wrong place at the wrong time. That’s the real story of this past year, and it’s why navigating this landscape has been so uniquely challenging for so many good businesses. 

What’s Next, According to the Experts

So you may be asking at this point, ​‘Okay, but what do we actually do with all of this?’ And that’s the right question to be asking. To answer it, we pulled from a broad range of expert sources, including the World Economic Forum, Harvard Business School, the Institute for Supply Management, and leading trade and supply chain advisors. Perhaps it’s no surprise that the guidance that emerges is not exactly consistent.

The Legal Landscape is Far From Settled

The courtroom battles are accelerating, not winding down. More than 3,000 tariff lawsuits have been filed at the U.S. Court of International Trade, with nearly 1,000 new cases filed in March 2026 alone. Interest on refunds is accruing at an estimated $650 million per month.¹⁶ A coalition of 24 states is actively challenging the Section 122 replacement tariffs in court. And a new wave of consumer class action lawsuits is targeting companies that passed tariff costs on to customers and are now seeking government refunds, alleging those companies were ​“made whole twice.” 

If any of this touches your business, talk to your legal counsel now, not later.  And this week, the administration launched its new tariff refund site.  We will be reporting back on how this process goes for both consumers and manufacturers.

The Reshoring Reality Check

The reshoring boom has been more promises than actual delivery. Total construction spending on manufacturing declined from $230.9 billion in January 2025 to $196.2 billion in January 2026.¹⁷ Reshoring is coming, with recent announcements from car and pharma manufacturers, but it will take years, not months, to have a positive effect on these businesses and the US economy.

New Tariff Fronts 

Pharmaceutical tariffs of up to 100% and ongoing semiconductor investigations signal that tariff expansion is not finished. The broader expert consensus from the World Economic Forum to Harvard Business School to ISM is consistent and clear: the traditional globalized model built on just-in-time logistics and cost optimization is being replaced by regionalized configurations built around agility, resilience, and geopolitical insulation. 

The businesses thriving right now acted early, invested in trade compliance guidance, and treated supply chain restructuring as a strategic investment rather than an emergency cost. The manufacturers who are still waiting for things to stabilize before making moves are the ones falling behind.

Mark This Date: July 24, 2026

The Section 122 tariff expires on July 24, 2026. Whatever happens on that date, be it extension, legal challenge, replacement, or expiration, will have immediate implications for your cost structure and competitive landscape. It is the single most important date on the trade policy calendar right now. Watch closely.

A Reset, or a Permanent New Reality?

For economists and policy analysts, the tariff era is a fascinating case study in trade theory. For manufacturers, it’s the business environment you wake up to every morning. The past year has made one thing undeniably clear: this isn’t a temporary disruption that will resolve itself when the right deal gets signed. 

The tariff era has fundamentally altered global supply chains, trade relationships, and the manufacturing investment calculus in ways that won’t simply unwind. The manufacturers who will emerge strongest aren’t necessarily the ones who were least affected. They’re the ones who used the disruption as a forcing function, made decisions when the picture was still unclear, and refused to let uncertainty create paralysis. 

The road ahead is still uncertain: The legal battles aren’t over and July 24, 2026, looms large. But the era of cheap, stable, predictable global supply chains is over. For manufacturers willing to adapt, that also represents a genuine opportunity to compete on terms that haven’t existed in decades.

So is this a reset, or a permanent new reality? Honestly, it’s both. And the manufacturers who ask that question and act on the answer are the ones we’ll be writing about next year.

Continuing the Conversation

If you’re reading this and want to share how these issues have affected your manufacturing business, we would love to hear from you. 

Please reach out via email at advisorycouncil@​top10erp.​org and let us know what we got right, what we missed, or what more you’d like to hear about on this complicated topic.

Sources & References

1. Council on Foreign Relations — A Year After Liberation Day: Experts Review the Costs of Trump’s Tariffs https://www.cfr.org/articles/a‑year-after-liberation-day-experts-review-the-costs-of-trumps-tariffs
2. Con​gress​.gov / CRS — Presidential 2025 Tariff Actions: Timeline and Status https://​www​.con​gress​.gov/​c​r​s​-​p​r​o​d​u​c​t​/​R​48549
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