Navigating the China-U.S. Trade War: Insights for Midwest Manufacturers to Thrive

By Tom Goettl with expert analysis from Emily LeVasseur, Waypost Advisors

If it feels like supply chain déjà vu, you’re not alone.

Between shifting tariffs, geopolitical chess matches, and raw material bottlenecks, the current China-U.S. trade war has manufacturers—and their profits—on edge. To help bring some clarity to the chaos, I sat down with self-described “supply chain geek” and strategist Emily LeVasseur, Co-Founder and Managing Director of Waypost Advisors, for an informative conversation on what we’re seeing, what might come next, and what Midwest manufacturing companies should do now.

Paralysis in the Face of Uncertainty

Many companies are simply frozen. As Emily put it, “It would frankly be easier if we knew for sure there would be 145% tariffs for the next four years. Then we could plan. But the not knowing is worse.”

Course correcting isn’t an easy or affordable option for manufacturers who’ve invested millions in Chinese production or rely heavily on China-sourced materials. And if the trade tides shift again, will the massive cost of relocating supply chains be worth it?

Not All Supply Chains Can Pivot

If you’re sourcing materials from China that are available elsewhere, it’s time to start scouting. But if your capital investment or technical needs are tied to Chinese and simply cannot be produced anywhere else in the world, it may be difficult or impossible to move. And even if you can, not all substitutes are equal. One Waypost Advisors’ client’s attempt to shift to India found textile and fabric quality issues they couldn’t overcome.

“Some companies will need to make significant strategy changes, such as growing markets outside of the US, in order to continue to grow.,” Emily shared.

Margin Mayhem and Tariff Shock

Companies importing finished goods from China are already feeling the squeeze. “You’re losing money on every unit you ship,” Emily said. For others relying on raw materials, the impact depends on just how much of your cost of goods is China-based.

A Moment for Innovation

Critical industries, like semiconductors and other high-technology industries, are already reshoring. “This is a moment for innovation,” Emily said. “Just like COVID taught us new ways to work and operate, this pressure will spark new solutions.” As U.S. companies read and react to the new playing field, other industries will quickly follow suit and meet the moment with cost-efficient ways to meet customer demands. Companies that best innovate and execute now will come out well ahead of their competitors, similar to what transpired five years ago.

Strategic Steps to Take Now

Emily recommends:

• If you’re sourcing from China and can find alternate suppliers—start.
• If you’re contract manufacturing in China, evaluate moving to countries like Mexico, India, or Vietnam. Even a partial shift could soften the blow.
• Assess if materials sourced in China can be transferred to another country for final manufacturing.