Tariffs Already Are Causing Supply Chain Disruptions, NFTC Survey Finds
An Aug. 5 survey from the National Foreign Trade Council reveals concern among importers that current U.S. tariff policies are causing supply chain disruptions, inflating costs, and delaying planned projects.
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Amidst the rising prices across supply chains, a blog post accompanying the survey warned that "the current environment" may cause a higher investment in companies' "internal capacity to identify and mitigate risks and increased compliance costs." The survey found that "a majority of respondents" reported that "overlapping measures" from Section 232 and IEEPA tariffs are "significantly increasing their compliance burdens."
According to the survey, 94% of businesses reported that procurement of raw materials is the most severely affected part of their supply chain. Nearly 90% of respondents said that their manufacturing capacity has suffered, and 76% are experiencing disruptions in warehousing and aftermarket services. These challenges are forcing companies to reduce or delay product rollouts (56%) and scale back U.S. operations (47%). Additionally, 75% say tariff uncertainty is preventing them from making long-term investments in U.S. operations.
In the food and agriculture sector, every respondent said tariffs have negatively impacted their ability to access raw materials, maintain food safety standards, and invest in sustainability. The survey found that half of respondents have already altered suppliers or rerouted shipments to cope.
Adding to the uncertainty is foreign retaliation: up to 60% of companies reported that international countermeasures to U.S. tariffs are weakening their global competitiveness. Many respondents said that they are reconsidering long-term investment plans within the U.S.
Despite these challenges, companies remain supportive of policies that boost U.S. industry. The survey found that respondents asked for a "more structured and strategic tariff approach" which would include "phased implementation and predictability." Additionally, respondents stressed the importance of pairing tariffs with manufacturing incentives, such as "investment incentives, workforce training and collaboration mechanisms," and called for deeper trade engagement with "high priority" partners like the EU, China and India.