NEWS

In 2025, President Donald Trump’s administration has introduced significant regulatory and policy changes poised to reshape the U.S. manufacturing landscape. These initiatives aim to bolster domestic production, reduce reliance on foreign imports, and streamline regulatory frameworks. While these policies present potential benefits, they introduce a new set of challenges that manufacturers must navigate.

Trade Policies and Tariffs

A cornerstone of the administration’s strategy is the implementation of tariffs designed to protect domestic industries. Notably, a 25% tariff on imported aluminum and steel has been enacted, targeting raw materials rather than finished products. This approach seeks to incentivize the use of domestically sourced metals, potentially revitalizing U.S. metal production. However, industries reliant on imported components may face increased production costs, which could impact pricing and competitiveness. While many of the top steel producers in the US have adopted the circular economy model (investing heavily in metal recycling processes), they still rely heavily on raw material exports from countries like China, Germany, and Brazil. 

The administration has signaled a willingness to impose tariffs on foreign competitors of U.S. companies, such as Intel, to encourage domestic partnerships and investments. This strategy aims to strengthen the U.S. position in critical sectors like semiconductor manufacturing. While such measures may foster domestic collaborations, they also risk escalating trade tensions and potential retaliatory actions from trade partners. We have already seen these dynamics start to play out with our closest neighbors. 

Regulatory Reforms

In an effort to reduce bureaucratic hurdles, President Trump issued an executive order mandating that for every new regulation introduced, existing regulations must be eliminated to offset the cost. This “regulatory budgeting” process is intended to streamline compliance requirements and reduce operational costs for manufacturers.  This type of deregulation policy, where new regulations must be offset by the elimination of existing ones, creates an unpredictable regulatory environment. It is crucial that companies evaluate and strengthen their internal regulatory, safety, and product stewardship teams to ensure they remain compliant with evolving standards.

Incentives for Domestic Manufacturing

The administration is expected to revamp its “America First” approach by offering new or enhanced tax breaks and subsidies to boost domestic manufacturing. These incentives aim to encourage companies to reshore operations and invest in U.S. facilities. While this could lead to job creation and economic growth, manufacturers must be wary of higher labor costs and the complexities of restructuring supply chains.

Energy Policies

A renewed focus on “unleashing” American energy resources has led to relaxed regulations on the extraction and production of critical minerals and fossil fuels. This policy aims to reduce energy costs for manufacturers and decrease dependence on foreign energy sources. However, it also raises serious environmental concerns and may face opposition from environmental advocacy groups. 

Labor and Workforce Considerations

Efforts to revitalize domestic manufacturing may be challenged by a skills gap in the U.S. workforce. Prior to the 2024 election, studies indicated that U.S. manufacturing was expected to have 2.1 million unfilled jobs by 2030. Addressing this gap is crucial for the success of the administration’s manufacturing agenda and will require investment in workforce development and training programs. To bridge the growing skills gap in U.S. manufacturing, companies must take proactive steps to attract, train, and retain a skilled workforce. In our “Green Skills Gap” article, The Chatham Group generated a playbook on how to attract and retain top talent in this highly competitive hiring landscape by implementing a few of the following strategies: 

• Invest in workforce training and upskilling
• Expand outreach to early-career workers
• Advocate for pro-manufacturing policies
• Outline career advancement opportunities for current employees
• Offer opportunities for higher education 

The Trump administration’s 2025 regulatory and policy changes present a complex landscape for the U.S. manufacturing industry. While initiatives aimed at promoting domestic production and reducing regulatory burdens offer potential advantages, manufacturers must carefully assess the implications of increased tariffs, evolving compliance requirements, and workforce challenges. Proactive adaptation and strategic planning will be essential for companies to thrive in this dynamic environment.

Learn more about how we are setting our clients up for success amidst growing regulatory uncertainty – crest@mrichatham.com