Manufacturers continue to navigate a volatile tariff environment marked by uncertainty, cost pressures, and shifting trade dynamics. Drawing on insights from more than 100 manufacturing leaders, the analysis shows that while overall concern remains high, there are early signs of stabilization as companies adapt through pricing strategies, supply chain diversification, and selective investment decisions.
Compared to Manufacturers Alliance’s April 2025 tariff survey, the January 2026 findings indicate reduced concern levels, but continued caution across investment and sourcing decisions. Tariffs remain a continued factor shaping competitiveness and operational planning.
In addition to overall feedback from members, the survey results were viewed by the top six subsectors:
- Electrical equipment (NAICS 335)
- Fabricated metal (NAICS 332)
- Machinery (NAICS 333)
- Miscellaneous manufacturing (NAICS 339)
- Primary metal (NAICS 331)
- Transportation equipment (NAICS 336)
Key Insights
- Tariff concern remains high, but severity is easing. Fewer manufacturers report acute disruption, down 19 percentage points, from 36% in April 2025 to 17% in January 2026, suggesting early adaptation rather than resolution.
- Decision-making is stabilizing, not fully recovered. Strategic paralysis is declining, yet 57% of manufacturers continue to plan cautiously amid ongoing uncertainty.
- Investment is being adjusted, not abandoned. Major capital pullbacks remain rare, with 38% of organizations proceeding under revised timelines or added risk mitigation.
- Supply chain action is underway. Manufacturers have shifted from monitoring to incremental implementation, driven primarily by cost pressure and supply chain disruption.
Overall Concern About Tariff Impacts
Source: Manufacturers Alliance surveys, April 2025 and January 2026
Nearly 88% of respondents report being moderately or very concerned about the impact of tariff policies on the manufacturing industry, down from 95% in the prior year.
Rapid Intel: Persistent concern—despite modest improvement—signals that tariff uncertainty remains embedded in strategic decision-making, influencing risk tolerance, forecasting accuracy, and capital deployment.
Subsector Deep Dive:
- In electrical equipment and fabricated metal, "Very Concerned" responses dropped by 20 to 30 percentage points.
- Miscellaneous manufacturing saw a massive shift from 81% down to 46%.
- Machinery and primary metal both saw “Very Concerned” increase.
- Transportation equipment showed 42% as “Very Concerned” in January 2026.
Impact of Tariffs on Strategic Decision-Making
Source: Manufacturers Alliance surveys, April 2025 and January 2026
In January 2026, 57% of manufacturers report that tariff policies are having a moderate or significant negative impact on their ability to make confident strategic decisions related to sourcing, pricing, and investment timing—down sharply from 70% in April 2025.
Rapid Intel: While the severity of disruption appears to be easing, the data suggests companies are learning to operate within the tariff environment. Still, the cost of slower decisions, incremental risk mitigation, and constrained flexibility in long-term planning is being felt. According to one manufacturing leader, "The lack of any coherent policy has caused us to delay investment, pass along price increases, and slow decision-making.”
Subsector Deep Dive:
- Fabricated metal manufacturers reported “Significant Negative Impact” on decision-making much less, moving from 27% to 6%.
- The machinery subsector also reported lower levels of “Significant Negative Impact,” moving from 43% down to 16%, and miscellaneous and electrical equipment showed similar trends.
- Conversely, primary metal bucked the trend, as "Significant Negative Impact" rose from 0% to 20%, signaling a rise in hesitation related to decision-making.
Impact of Tariffs on Competitiveness and Global Positioning
Source: Manufacturers Alliance survey, January 2026
Approximately 44% of manufacturers report that tariffs have made them less competitive internationally, while another 13% indicate tariffs have improved their competitive position, often through reshoring or protection from low-cost imports.
Rapid Intel: Divergent impacts highlight that tariffs are creating both winners and losers, reshaping competitive dynamics across subsectors and influencing long-term footprint decisions.
Subsector Deep Dive: Electrical equipment and miscellaneous manufacturing are struggling most, with 55% and 57% respectively reporting decreased competitiveness. However, primary metals and transportation equipment reported a competitive boost, with 25% and 21% respectively noting the tariffs helped level the playing field against unfair imports.
Expected Change in U.S. Investment Plans Due to Tariffs
Source: Manufacturers Alliance survey, January 2026
Roughly half of respondents indicate tariffs have no significant influence on U.S. investment plans over the next one to two years.
Rapid Intel: Investment hesitation can constrain capacity expansion, modernization efforts, and workforce growth, particularly in capital-intensive subsectors. In the September 2025 CEO Business Outlook, many CEOs expected increased investment in areas such as infrastructure, automation, and supply chain optimization, even as delayed capital investments remain a notable medium-term impact of tariffs.
Subsector Deep Dive: Subsector investment resilience diverged sharply.
Miscellaneous manufacturing showed the largest turnaround, with the share reporting investment plans unaffected by tariffs rising from 3% to 48%.
Fabricated metal products emerged as the most resilient, with 71% decoupling investment from tariff volatility (up from 40%).
Primary metals remained stable at 50%.
37% of transportation equipment manufacturers reported an increase in investment in January 2026.
Tariff Impacts on Capital Allocation Strategies
Source: Manufacturers Alliance survey, January 2026
Manufacturers are fairly evenly split on whether tariffs are impacting forward momentum on major capital initiatives.
Rapid Intel: Rather than abandoning growth plans, manufacturers are adjusting how and when they invest. This pattern points to tactical flexibility, sequencing projects, derisking commitments, and focusing capital on high-return initiatives. Concurrently, companies are preserving long-term strategic objectives amid ongoing tariff uncertainty, as smaller manufacturers face more constrained investment options.
Subsector Deep Dive:
- In January 2026, primary metal and fabricated metal manufacturers show the strongest insulation from tariffs, with 76% and 82%, respectively, reporting no significant impact on long-term investment strategy.
- Electrical equipment and miscellaneous manufacturers show greater caution, with 52% and 47% proceeding under revised timelines, and transportation equipment is the only subsector where 10% report pausing or canceling major investments.
Supply Chain Adjustments
More than three-quarters of respondents report making moderate or minor changes to their physical supply chains or actively monitoring potential disruptions while waiting for the U.S. Supreme Court’s ruling on the legality of the tariffs. Common member responses about how tariffs have affected overall business performance include notes about supplier diversification, regional sourcing shifts, and increased administrative effort to manage compliance and cost recovery.
While most manufacturers report they are not delaying decisions (73%) as they await legal clarity, open-ended responses highlight how pricing pressure and supply chain strategy are increasingly intertwined with 75% of respondents citing increased costs, followed closely by supply chain disruption or reconfiguration (53%).
In the September 2025 CEO Business Outlook, more than half of CEOs reported actively relocating or planning to relocate sourcing, driven primarily by risk reduction and tariff-related incentives or disincentives. The most common targets, including the United States and Mexico, mirror the regional sourcing and diversification strategies cited by respondents in this study.
Rapid Intel: Manufacturers are recalibrating supply chains in ways that prioritize resilience and flexibility over speed or scale. While this approach reflects lessons learned from prior disruptions, it also introduces added complexity and execution risk—particularly as organizations balance supply chain stability with persistent margin pressure in an uncertain environment. According to one executive leader, “We are reconfiguring some of our supply chain sources to mitigate impact while trying to stay competitive.”
Subsector Deep Dive:
- Miscellaneous manufacturing and electrical equipment were the most likely to pause action—38% and 32% respectively—with reports of delaying decisions on supply chain or operations.
- In contrast, machinery and transportation equipment show greater momentum, with just 17% in each subsector reporting delays.
- Primary metal and fabricated metal largely continues forward despite uncertainty (73%–75% not delaying).
Tariffs’ Effects on Physical Supply Chain
Source: Manufacturers Alliance surveys, April 2025 and January 2026
In looking at supply chain changes in January 2026, 77% of respondents reported implementing changes to their physical supply chain up sharply from 56% in April 2025. Many organizations have moved beyond monitoring and are now executing incremental adjustments. Notably, the percentage of respondents indicating that tariffs are “not a current factor” has dropped significantly.
Rapid Intel: Rather than triggering sweeping supply chain redesigns, tariffs are driving steady, incremental reconfiguration across a broad swath of manufacturers. This shift reflects a more mature, adaptive response where companies are actively adjusting sourcing, logistics, and supplier strategies to manage risk and cost, while avoiding disruptive, large-scale changes amid ongoing policy uncertainty.
Short or Long-Term: How Manufacturers Are Viewing Global Strategic Changes
Source: Manufacturers Alliance survey, January 2026
Only 27% of respondents describe their strategic changes as permanent, long-term shifts in global strategy.
Rapid Intel: The high level of indecision underscores how tariff uncertainty is limiting long-range strategic clarity. Many manufacturers are acting pragmatically in the short term while preserving flexibility, delaying irreversible commitments until greater policy stability emerges.
Subsector Deep Dive:
- Fabricated metal manufacturers were the most decisive that their changes were long-term and permanent shifts at 40%.
- Primary metal showed the most caution with 45% responding that decisions were temporary and 55% stating that they don’t know if decisions are permanent yet.
- Transportation equipment had the highest score for “Decision pending” at 62%, indicating that many in the sector are not ready to commit to the adjustments they’ve made.
- Electrical equipment, machinery, and miscellaneous manufacturing were spread more evenly between permanent, temporary, and unknown for changes they’ve made.
Summary
The January 2026 findings show that while tariff uncertainty remains a defining challenge for manufacturers, the nature of its impact is evolving. Compared to April 2025, fewer organizations report acute disruption or decision paralysis, suggesting manufacturers are adapting and learning to operate within a more complex trade environment.
Rather than driving widespread pullbacks, tariffs are prompting measured, incremental adjustments. Manufacturers are revising investment timelines, recalibrating supply chains, and strengthening internal processes to manage cost, compliance, and risk. These actions allow many to move forward while preserving flexibility amid continued policy and legal uncertainty.
This pattern of measured adaptation is consistent with broader industry observations. According to Deloitte Insights, tariffs are increasingly reshaping corporate strategy and supply chain design over time, reinforcing the shift from short-term disruption toward longer-term strategic adjustment. Together, these findings underscore that tariffs are no longer a temporary disruption, but a structural factor shaping how manufacturers plan, invest, and compete.
AI Transparency:
Data and content for this article was analyzed with assistance from an AI tool and reviewed by the research team.
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