Worcester Business Journal

wbjournal.com | May 5, 2025 | Worcester Business Journal 7 "Leveraging strong relationships with supply chain partners allows for discussion and negotiation over how to share the impact of increased costs due to tariffs," Fazendeiro said. "Other ac- tions to mitigate tariff impacts include diversifying supply chains, assessing the feasibility of local sourcing, and negotiating payment and other terms with suppliers." Even with extensive knowledge of their supply chains, Fazendeiro warned the rapidly-changing situation with tariffs is largely unpredictable. "e uncertainties over the out- come of the tariff war and government restrictions makes it very difficult for businesses to plan ahead," he said. "e supply chain impacts faced by U.S. businesses are extensive and difficult to navigate. e tariff war is making busi- ness planning and product fulfillment nearly impossible, with the rules of the game changing every day." Tariffs vs. open market approach While not every manufacturer is sounding the alarm, the impact is being felt. "e uncertainty regarding Trump's tariffs and the damage by [Elon] Musk's job and funding cuts is having a direct impact on our ability to purchase raw materials and deliver cost-effective finished goods to our customers," wrote one manufacturer who participated in AIM's anonymous March survey. AIM feels an open market approach would be much healthier for manufac- turers than trade wars. "e most effective way to build the manufacturing base of Massachusetts is to provide domestic manufacturers fair access to overseas markets anxious to buy the technologically sophisticated products in which we specialize," Brooke omson, president and CEO of AIM, wrote in an April post on the orga- nization's website, which argued Trump's tariffs could impede the state's economy. "Open markets represent the surest path to job growth for the com- monwealth and the rest of the nation." Some are hoping for carve-outs for particular imported materials needed by manufacturers, but that's easier said than done, Gries said. "Can they figure out a way to have tariffs be less onerous for critical input?" she asked. "e problem is my critical inputs are a little bit different than your critical inputs. ere's going to be some challenges for lots of people going forward." to be manufacturing, and [NAM] is pushing really hard to figure out how to nudge the [Trump] Administration along and give them ideas, because it is kind of a horrible situation we're in with this just unnavigable tariff confusion." Greis' uncertainty is mirrored by others in the manufacturing space. Since December, business confidence for local manufacturers has been shaken, with the blame being pointed toward tariffs and rising costs, accord- ing to the Associated Industries of Massachusetts. e AIM Manufacturing Index, which lagged behind overall business confidence for much of 2024, sat at 52.3 in December. By March, confi- dence among Massachusetts man- ufacturers had fallen into negative ter- ritory, at 45.1. e index is measured on a 100-point scale, where any score below 50 represents a pessimistic outlook. e bulk of the president's eco- nomic focus has been put toward implementing tariffs. ese efforts are meant to encourage the return of American manufacturing and right what Trump sees as an imbalance between what the country's businesses and consumers sell into the global trade market versus what they buy. While White House trade adviser Peter Navarro has claimed the ad- ministration is aiming for a goal of 90 international trade deals in 90 days, as of April 29, the Trump Administra- tion has yet to secure a single one. In the meantime, implementation of some tariffs have been delayed, while others have been made even more harsh, as key trade partners like China have responded with tariffs of their own. Monitoring supply chains While manufacturers are already more likely aware of the nuances of their supply chains thanks to their dealings with the impact of the COVID-19 pandemic, Olivia An- tonelli, supply chain manager for the Massachusetts Manufacturing Exten- sion Partnership, said firms should gain a deeper understanding of every level in order to forecast possible dis- ruptions caused by tariffs and other geopolitical issues. "We hope our companies are hav- ing visibility down your supply chain, but we still oen find that it's just at one level," Antonelli said at the WBJ Manufacturing Summit. "But are you asking those questions of 'Who are your suppliers' suppliers?' at way you can keep an eye out on the news for whatever's going on, just to get a better idea of how your company is going to be impacted." Manufacturers now need to spend more time focusing on their supply chains, said Fazendiero. prohibitively expensive. As a result, our local manufacturers are actively assessing whether they can shi to new suppliers for these raw goods." e Gov. Maura Healey Administra- tion has launched a survey for business owners to gauge current or anticipated impacts caused by new tariffs, the first steps in an effort dubbed the Tariff Re- sponse and Busi- ness Operations Support Initiative, a state initiative to understand the impacts of tariffs. While it's too early to draw conclusions from the survey results, tariffs are having a notable impact on manufacturers' plans, said Linville-Engler. "It's clear through our conversations with manufacturers across the state that tariffs are creating significant uncer- tainty, and many businesses are having to adapt their operations and growth plans," he wrote. Confidence declining, no deals yet Noting that a large amount of imports into the country are components and materials used by manufacturing firms, Greis said the confusion around tariffs is causing slowdowns in customers. "is confusion just creates uncer- tainty problems." Greis said. "In fact, I was on a call with Mike Davin, from the National Association of Manufac- turers. He said that 56% of imports are inputs to manufacturing. So you're not doing trading, you're not going The Clark Mini MBA clarku.edu/minimba Four courses that will transform your career. Generous Scholarships for Central Massachusetts Residents School of Business C L A R K U N I V E R S I T Y Mini. But Mighty. 0 $1B $2B $3B $4B $5B $6B $7B $8B Non manufactured commodities imported '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 $6.76B $5.65B Sources: U.S. Census Bureau & U.S. Bureau of Economic Analysis Imported raw materials into Massachusetts Massachusetts businesses have imported between $5 billion and $7 billion worth of non-manufacturered commodities in the state over the past 10 years. These mate- rials can then be used by manufacturers to make finished products. Ben Linville-Engler, director and chief investment strategist of MassTech Brooke Thomson, president and CEO of Associated Industries of Massachusetts W

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