What are Tariffs and How do they Impact Workforce Planning in the U.S.?
The root challenge? Global supply chains are deeply embedded, and reshoring is rarely a simple fix. In some cases, the high cost of U.S. labor may make outsourcing more attractive, but manufacturers of complex products will need to balance reliance on foreign suppliers with reshoring work.
That’s especially true for the automotive industry, which relies on cross-border collaboration to assemble car parts for U.S. vehicles. Tariffs on both raw materials and assembled parts stand to reduce domestic auto production by 30% and threaten jobs in the industry. Rebuilding jobs in the U.S. manufacturing sector will take time, with strategic investments in infrastructure and skilled labor that balance offshoring and domestic production.
Tariffs don’t just raise costs – they destabilize supply chains and lengthen delivery timelines. Many companies are shifting from just-in-time inventory management to just-in-case strategies, stocking up on critical products to mitigate against higher costs. In this scenario, large shipments and long delivery timelines will require a flexible workforce that can scale with operations.
Tariffs will also have an impact on consumer demand. In the tech industry, tariffs on raw materials like steel and rare earth minerals will increase retail prices of consumer electronics, slowing down shipments as demand drops. This may also increase the cost of IoT in both logistics and manufacturing, requiring a strategic approach to balancing automation and labor.
International firms may also decide to restructure supply chains to keep last-mile delivery within destination countries, changing the nature of their workforce. Monitoring changing employment laws in other countries will be important as tariffs spark new and varied employment legislation at distribution centers.
Agility is more than just a buzzword – it’s the way forward for organizations adapting to tariffs in 2025. To stay competitive, organizations can adopt a hybrid approach: upskill domestic workers for high-value roles, embrace automation and build a flexible workforce that matches demand.
Automation and predictive analytics will create a competitive edge in navigating unpredictable supply chains. An ongoing skills shortage of trades workers can limit the availability of specialized parts, leaving manufacturing and logistics companies more vulnerable to tariffs.
Upskilling and cross-training existing workers can help stretch limited budgets and give valued employees a clear career path. Amid a new great recession, this can help retain skilled workers while securing critical supplies.
Temp, contract, and gig workers can help manufacturing and logistics companies stay agile as demand changes. Contingent opportunities can also be a valuable way for new grads to find work in a field with tight labor budgets, allowing employers to innovate without straining operational budgets.
Randstad’s self-service app lets you find qualified workers for open roles quickly, with I-9 and E-Verify compliance included. Additionally, this can also enable you to scale workforce as necessary without the extra administrative cost involved in complex screening.
As the cost of materials and parts increases, it’s more imperative than ever for manufacturing and logistics to embrace automation. Automated and AI-powered production lines can not only boost the productivity of skilled workers – they can also increase operational efficiency with predictive analytics and machine learning.
However, digital innovation is about more than just technology investments; it’s about investing in a workforce that supports smarter factories and warehouses. Strategic investments in AI and automation can balance long-term innovation with short-term strategies to minimize operational disruption while positioning companies for success.
The ripple effects of 2025 tariffs will challenge manufacturing and logistics companies to rethink their current talent strategies. Successful workforce planning in 2025 will involve building agility into every aspect of talent management, positioning companies to adapt to market fluctuations.
Upskilling and cross-training, flexible staffing models, and automation will help position organizations for long-term resilience in an increasingly unpredictable marketplace. As your partner for talent, our specialized workforce solutions are uniquely positioned to help organizations navigate the challenges of tariffs.
In today's complex trade environment, the right workforce partner is more valuable than ever. This strategic move will not only give you an edge over others in securing the right talent but also create a safety net in uncertain economies.
On the other hand, turbulent times are a trump card for you to revise and optimize your hiring strategy for the better. Contact Randstad today to develop a tariff-resilient workforce strategy that turns uncertainty into opportunity.
