Arlington, VA – June 18, 2025 - 90% of manufacturers say geopolitical risk is stalling strategic development, with 94% stating tariff uncertainty is impacting investment and sourcing decisions.
"Navigating Uncertainty: The Geopolitical Impact on Manufacturing Trends 2025,” conducted by the Manufacturers Alliance Foundation in partnership with Roland Berger, found that at a time marked by geopolitical tensions and trade and economic uncertainty, manufacturers are reassessing their strategies to navigate an increasingly volatile climate.
The study, the second in an in-depth research series looking at the evolving forces shaping the manufacturing sector, is based on a survey of more than 150 US-based manufacturing executives, as well as in-depth interviews with nearly two dozen CEOs, in sectors including machinery, computers and electronics, chemicals, food, plastics and rubber.
Stephen Gold, President of Manufacturers Alliance Foundation and President & CEO of Manufacturers Alliance shared, “Our latest research shows a sector grappling with complex challenges—ranging from policy uncertainty to talent shortages—but also uncovering opportunities to gain competitive advantage through technology, regionalization, and agility.”
The research reveals a shift in mindset from long-term investment to risk management as companies adapt to heightened global instability.
Key Research Highlights:
- Shift Toward Localization: Manufacturers are rethinking globalization. The current climate favors “capex-light” strategies, repurposing existing sites or forming regional partnerships, to localize operations efficiently.
- Changing Production Geography: Companies are increasingly turning to lower-risk markets like the UK and Japan over traditional low-cost hubs such as China and Mexico, favoring stability over cost savings.
- Talent as a Critical Pressure Point: 88% of executives expect workforce challenges to worsen due to geopolitical risk. In response, manufacturers are doubling down on workforce development, upskilling, and automation to build resilience.
- Accelerated Digitalization: Leaders in the industry are twice as likely to turn to digital tools as a strategic buffer against uncertainty, signaling a decisive move toward Industry 4.0.
- Rise of Customization: 72% of manufacturers are prioritizing product development to better match local demand, further supporting regionalization trends.
- Sustainability Takes a Limited Hit: While many foresee a pullback in sustainability investments due to geopolitical distractions, companies with sustainability embedded in their core offerings remain on their goals.
Michelle Drew Rodriguez, Partner at Roland Berger, shared, “Manufacturers are entering a new strategic era. One where geopolitical risk isn’t just influencing decisions, it’s rewriting the playbook. Now more than ever, resilience, adaptability, and regional relevance are the rising indicators of global manufacturing competitiveness.”
