MADE IN THE USA: What Trump presidency could mean for manufacturing 

When a new presidential administration is elected, the future becomes a guessing game. 

In the four years following Donald Trump’s ascendancy to the presidency on Jan. 20, businesses and consumers will be forced to adjust to new policies affecting supply chain and distribution channels, which could create opportunities and challenges for the U.S. economy. 

For the manufacturing industry in particular, promises from Trump and running mate J.D. Vance about the implementation of tariffs on certain countries could weigh well for some manufacturers and poorly for others, leaving industry executives playing the waiting while assessing their next move. 

Jonathan Dawley, CEO and president of South Carolina-based KION North America, which produces electric counterbalanced forklifts, said the company is in “scenario-building mode” to adjust to potentially increased tariffs on goods that need to be imported from around the world. 

“What we were hoping is we would get to the election, through the election, breathe a sigh of relief, and begin seeing more purposeful movement on markets bouncing back,” Dawley said. “But I am actually kind of perceiving a little bit of stagnation from people doing exactly what we are doing, trying to assess what this is going to mean and determining those next steps.” 

Hesitation from global manufacturers 

Post-election, Trump has promised to implement a 25% tariff on all products entering the country from Canada and Mexico, as well as an additional 10% tariff on goods from China, in addition to tariffs already in place. 

Canada, Mexico and China are the U.S.’s top suppliers, according to the U.S. Census Bureau. 

Rating the current U.S. economy a B+, Joey Von Nessen, a research economist at the Darla Moore School of Business at the University of South Carolina, said the anticipated tariffs could play a large role in hesitation from global manufacturing companies. 

“At the end of the day, if we look broadly, the net effect of tariffs for the U.S. as a whole tends to be negative,” Von Nessen said. “It lowers overall economic activity because the loss associated with price increases for consumers typically outweighs the benefits to the protected industries.” 

Tariffs typically affect companies in two ways, Von Nessen said. First is to affect the supply chain, leaving the company paying more for raw materials they may import from overseas. 

Second, companies can have disruptions to the distribution channel, Von Nessen said. As the U.S. increases tariffs on its imports, the countries exporting those products may retaliate by putting tariffs on the imports they are receiving from the U.S. as well. The repercussions of that counterattack can affect the demand for the companies in the U.S. that are selling those products. 

Recovery for companies that are disturbed by the supply chain and distribution channel hinderances often falls back to whether U.S. companies can replace those needs. If the company can source its materials and sell its product inside the U.S. market, the setbacks can be minor compared to those who can’t, Von Nessen said. 

“The business community has seen this before, this is not their first rodeo,” Von Nessen said. “We saw a number of tariffs that were introduced in 2018 during the previous Trump administration that companies had to adjust to, and we had the pandemic which saw massive destructions against supply chains.” 

Working toward a global supply chain 

KION North America, headquartered in Summerville, has been looking to localize more of its operations into the U.S. to reduce production time and to have the capability to produce locally for the customer. Dawley said it is hard to scale a business while trying to import products from around the world. 

“We have all been working to have a global supply chain for many years,” Dawley said. 

As the German company has endured fluctuating freight costs and inflation, Dawley said it has done its best to keep the price of KION products “at bay” for customers. 

“It’s unclear to us as to what element of this is going to have to take on a pricing dynamic,” Dawley said. “But my assumption is that in the short-term, there is going to be a pricing dynamic to the end market. The movement to move local doesn’t come for free.” 

Dawley said the overall concept of strengthening U.S. product is great for the company, considering KION made the investment to create KION North America, locating to Summerville in 2015. He said though there may be a struggle to find solutions as quickly as possible, KION is “up to the challenge.” 

‘Nobody really knows’ 

Similar to South Carolina, Pennsylvania is a manufacturing-based economy, Don Cunningham, CEO and president of the Lehigh Valley Economic Development Corp., said. Companies such as Nestle, Crayola and Ocean Spray have a large presence in the region. 

Lehigh Valley, Pennsylvania, compares to the Greenville, South Carolina, business market, Cunningham said. The area has ranked as the top mid-sized region in the U.S., with Greenville around fourth in the ranking. 

For Cunningham, as a new presidential administration comes into office, businesses’ main concern is the uncertainty of what policies will be enacted, and which ones will be removed. 

“There is always a difference between what is said on a campaign trail and what gets enacted and when,” Cunningham said. “It’s like a crystal ball, nobody really knows. I won’t say there is reaction going on yet for different approaches.” 

Cunningham said a lot of focus is going toward what programs will be kept or discarded from prior administrations such as The Inflation Reduction Act, The CHIPS and Science Act and stimulus incentive programs. Attention is paid to where the money from those acts will be going considering projects that have been in the works through multiple presidencies. 

Cunningham said he doesn’t see many regions pin their success on one party in office or not, since many projects a business begins may endure multiple administrations from its start to finish. 

“Presidential administrations come and go, we have Republicans, we have Democrats,” Cunningham said. “Each region really has to keep its head down and keep working on its own economic strategy. Your state government plays a huge role, as does the coordination you have with your local government.” 

Benefiting domestic manufacturing 

For companies such as Unionwear, a shift to domestic production is nothing new. Unionwear’s hats, bags and other products are most notorious for being entirely U.S. made, even making presidential campaign merchandise as far back as 1992 for President Bill Clinton’s campaign. 

The Newark, New Jersey, company recently produced the camo hats for the Harris-Walz presidential campaign. 

“We just got so much exposure for doing the presidential merchandise. There are a lot of companies looking to have goods made domestically as a hedge against the tariff issue and we are top of mind for them,” Mitch Cahn, president of Unionwear, said. 

Cahn said another concern for the manufacturing industry could be Trump’s drive to implement more strenuous immigration regulations. If there are mass deportations, as promised on the campaign trail, Cahn predicts the demand to rise for positions such as sewing. 

The labor force may also see a decrease in numbers due to Baby Boomerswho are retiring in the next five years, according to Von Nessen, the University of South Carolina economist. Employers are left to fill spaces in the workforce where there are not as many workers available. 

Still, Cahn sees a bright future for domestic manufacturing. 

In 2025 the U.S. will be hosting the FIFA Club World Cup in New York, as well as celebrating the 250th anniversary of the Army, Navy and Marines. The following year is the country’s 250th anniversary celebration, and in 2028 the U.S. will be hosting the summer Olympics in Los Angeles. 

Even considering President Trump’s initiatives to enact tariffs as an effort to push for more U.S. markets to benefit, Cahn believes that the upcoming celebrations and events will already be making that impact. 

Cahn doesn’t believe that the increased tariffs will have a large impact in the overall growing manufacturing business, noting it takes a long time to scale manufacturing, considering demand for workers and room for additional infrastructure. 

“I think that well-thought-out policies that protect American industry without hurting the U.S. economy would be the best way to go,” Cahn said. “Tariffs will certainly help us in the short run but if they are done improperly and they hurt consumers and they hurt the economy, and there is inflation again, then it is definitely going to hurt our business.” 

Hollie Moore is a reporter for SC Biz News. Contact her at [email protected]. 

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