Manufacturers are bracing for impact on two fronts, and the clock is ticking. 

The continued uncertainty around tariffs increases pressure on firms to decide whether to move forward with reshoring or relocating supply chains, or wait for clarity from policymakers.  

Meanwhile, a widening labor gap threatens productivity from the shop floor to the back office, as skilled workers retire, and retention among new hires declines.

Together, these challenges slow progress, just when companies need to be more adaptable than ever. The cost of inaction is rising, and manufacturers need to make confident decisions now. 

Trade Pressure Is Mounting and Manufacturers Need A Plan

Trade uncertainty is now a top concern for manufacturers, with 76.2% of firms recently citing tariffs and stalled negotiations as their biggest business challenges. The temporary negotiation period has given manufacturers temporary breathing room to evaluate their potential next steps, but that window is about to close. The stakes are increasing, and once trade policies are finalized, there will be little time to react. Manufacturers will be forced to move quickly, racing to implement new plans and reposition themselves before competitors do the same. 

The Silver Tsunami Is Here

At the same time, manufacturers continue to navigate a growing workforce crisis. A quarter of the industry is aged 55 or older, and as these skilled workers retire, companies struggle to fill the gaps they leave behind. These Baby Boomers carry decades of institutional knowledge, and their departure creates operational, technical, and leadership voids that are difficult to replace.  Exacerbating the problem, retention among younger hires is slipping. While many companies are succeeding in attracting early-career talent, they’re struggling to keep them engaged long-term. The result is widening labor gaps at nearly every level of the organization, which threatens productivity, continuity and growth. So much so that an L2L study in 2024 found 81% of manufacturers reported disruptions in plant operations because of high turnover. 

You Can’t Eliminate Risk, But You Can Prepare for It

Although manufacturers can’t control trade policy or labor market shifts, they can take proactive steps to strengthen their operations and build resilience.  

The first step should be to understand the extent of risk across all departments within the firm. Conducting a tariff exposure audit can identify which products, suppliers and markets are most vulnerable, allowing leaders to prioritize mitigation efforts. Without a clear line of sight into the supply network, small issues can escalate into major disruptions before they’re even detected. Visibility also enables better decision-making. Rather than trying to address every risk at once, manufacturers can rank issues by business impact and decide where to allocate capital, adjust pricing or hedge costs. Just as importantly, visibility lays the groundwork for predictive tools to become more effective. AI tools can be useful here, but they can’t model risk or ROI if the underlying data is not clean and connected. Visibility powers the tech stack and makes real-time planning possible. 

To further manage tariff uncertainty, companies can use scenario planning powered by AI to model the financial and operational impact of different tariff or labor outcomes. This allows them to proactively plan ahead instead of reacting after policy changes occur, giving them a competitive advantage if disruptions do arise. Beyond short-term planning, these insights can help shape longer-term decisions like reshoring or nearshoring. In such cases, phased approaches reduce risk and provide flexibility as conditions evolve. 

To address labor shortages and retention issues, manufacturers should focus on strengthening and supporting the workforce they already have. Upskilling existing employees with AI-assisted training modules and predictive maintenance tools can bridge knowledge gaps and improve productivity without hiring additional staff. These tools offer real-time insights, personalized learning, and a structure to transfer institutional knowledge. Additionally, improving onboarding is equally as important, especially as retention among new hires declines. Intelligent systems and embedded knowledge-sharing platforms help new hires get up to speed faster, reduce early-stage turnover, and create consistency across teams. By investing in systems that support learning, retention and day-to-day problem solving, manufacturers can build a more capable and committed workforce. 

Companies that prioritize visibility, scenario planning, digital tools and cross-functional alignment will be better positioned to adapt to what comes next. The intersection of policy uncertainty and workforce instability is already disrupting operations, and waiting for clarity isn’t an option.  

Colin Dowd is industry strategy senior manager at Armanino.