How Manufacturers, Fabricators & Coaters Can Thrive in 2025

After weeks of rapid policy shifts, the majority of the U.S.’s new reciprocal tariffs have been paused, but some remain in force. If you’re in the manufacturing, fabrication, industrial painting, or powder coating business, your inbox has likely been flooded with “the sky is falling” alerts, and the current pause is the perfect time to get up to speed on the situation and make an effective plan.

We’ll break down which materials and countries are affected, how manufacturing and finishing operations—especially powder coating shops—might feel the pressure, and practical steps you can take to mitigate these changes and thrive as a business. This article is based on information that was current as of May 12, 2025, after it was announced that a temporary trade deal had been made with China.

The Tariff Landscape: What You Need to Know

While the tariff scene is evolving and subject to change, manufacturers and coaters need to understand which materials and imports are being targeted so they can prepare adequately. Here’s a breakdown of major developments impacting finishing, fabrication, and general manufacturing:

Steel Products

Steel tariffs—first enacted in 2018—were expanded in March of this year. The 25% base rate remains, but fewer exemptions and tighter loophole enforcement for things like trans-shipping make this round of tariffs potentially more disruptive. Since steel tubing, bars, rods, and flat-rolled products are commonly used in fabricated parts that are later coated, price hikes could ripple across the entire steel materials supply chain.

Aluminum Products

Aluminum tariffs, increased from 10% to 25%, now cover a broader range of products, including cans and sheets. This change hits fab shops and manufacturers that rely on pre-formed aluminum parts or extrusions. While Canada and Mexico are mostly exempt under the USMCA, imports from other major sources like China and Germany will be more expensive.

Machinery and Tools from China

A broad 145% tariff on all Chinese imports became effective on April 9, 2025. Then, on May 12, 2025, it was announced that a trade deal had been struck that would temporarily reduce the tariff to 30% for 90 days. If increased tariffs reappear, it will have massive implications for manufacturers considering imported machinery, paint or powder coating booths, industrial ovens, conveyors, control systems, or parts. As an example, there has been a recent influx of inexpensive Chinese automated finishing systems that mimic finishing lines from established US and European brands. Some US companies were willing to risk the long lead times and lack of support to save money. A substantial tariff drastically reduces the appeal of these systems by decreasing the cost difference. It may also put past purchasers of Chinese products at a disadvantage since repair and maintenance parts may no longer be within budget. Less costly equipment sourced from China, such as shop tools, will also be impacted, so this potential change demands attention from almost every US manufacturing business.

Universal Import Duty

This blanket 10% tariff affects ALL goods entering the U.S., with few exceptions. For powder coating operations that source chemicals and supplies (e.g., degreasers, pretreatment agents, or powders) internationally, this means higher input costs—regardless of supplier country.

Who’s Feeling the Pressure?

Metal Fabrication and Finishing

Higher costs on raw or semi-finished metals mean higher base material prices. Since powder coating or painting is typically one of the final steps in the production chain, some operations may see delays and/or cost increases passed down from upstream. This could have a broad impact because everyone from small fab shops to large-scale manufacturers of metal products commonly rely on powder coating and industrial painting as a part of their production process.

Automotive and Equipment Manufacturing

Tariffs on steel, aluminum, and auto parts could mean U.S. manufacturers of vehicle frames, truck enclosures, and other components for vehicles, vehicle conversions, or heavy equipment will feel margin pressure. Finishing specialists serving this market should anticipate tighter budgets, shifting sourcing strategies, and possible production slowdowns. Established customers may choose to bring coating in-house to save money and offset increased material costs.

Construction and Infrastructure

Aluminum extrusions and steel components for building products such as railing systems, window frames, and HVAC components are key targets of current tariffs. Businesses in this sector may find themselves juggling uncertain material costs and increased competition from domestic suppliers ramping up production. On the other hand, an increase in domestic suppliers could result in more choices when sourcing critical components.

Strategies for Coaters and Manufacturers to Mitigate Tariff Impacts

Cost Reduction

Now’s the time to reassess your vendor base for everything from industrial machinery to shop supplies and small hand tools. Domestic producers are increasingly attractive, especially if you’re considering replacement or upgrades to big-ticket items like capital equipment. Established US firms that have a strong presence in your market may have more appeal than ever before. Tools like ERP systems can help you compare pricing across suppliers, streamline procurement, and avoid duplication or waste.

For powder coating operations specifically, optimizing material usage and reclaiming powder overspray more efficiently can offer serious savings. Simple steps, such as reviewing your coating thickness targets and ensuring you’re not over-applying, will become more valuable if material prices rise.

Operational Efficiency

Boosting throughput and/or reducing processing costs without compromising quality is key. This may require fresh investment in equipment, as well as more sophisticated quality control processes. Improvements might include Overall Equipment Effectiveness (OEE) tracking and the implementation of predictive maintenance tools. Minimizing unplanned downtime with fabrication equipment, automated production machinery, and finishing equipment like pretreatment washers, spray booths, and ovens can dramatically improve your margin during times of supply strain.

Smart Automation

Automation doesn’t just mean production-boosting robots or sophisticated finishing systems, it includes software-based process improvements. Barcode scanning of materials/inventory/WIP, AI-assisted workflow scheduling, and real time inventory tracking are the types of improvements that can allow your team to run leaner, faster, and with fewer errors. For larger industrial painting and powder coating operations, using automation to track parts as they go from pretreatment through cure can shave off hours of manual labor every week.

Looking Ahead: Thriving in a Tariff-Challenged Business Environment

The current pause in tariff escalation offers a temporary window to reassess sourcing, optimize processes, and invest in equipment and systems that increase productivity and improve your company’s resilience. Your reliability to your customers, as well as your profitability as a business, may end up being linked to how well you navigate tariff-related volatility. But what if you want to do more than just survive—you want to thrive? Amidst the current uncertainty lies massive opportunity. Here’s what it looks like:

Leverage the “Buy American” Momentum

No matter what your political views, an undeniable outcome of the current tariff climate is a renewed national emphasis on sourcing domestically. As imported metals and machinery become significantly more expensive, large U.S. manufacturers will be increasingly turning to local suppliers and service providers. For businesses of all sizes, this is a unique opportunity to grab market share from overseas and beat large domestic players who are slow to adapt.

To take full advantage:

  • Go all-in on your company’s domestic roots. Whether your company is nationally known or competing in a small metropolitan area, emphasize your role in the domestic supply chain by touting your predictability, proximity to customers, reduced shipping times, competitive lead times, and responsive service. These are all highly appealing in a disrupted market, particularly one where price points are subject to fluctuation.
  • Get bona fide. There’s going to be a glut of companies who rely on “flag waving” to attract buyers. Distinguish your company by doing more than just talking the talk. Refine your reference lists and don’t take aging relationships for granted. Get involved with promotional and educational organizations within your industry. Join established business advocacy groups that have been supporting US businesses for years. If applicable, attain certifications like ISO 9001 or American Welding Society (AWS) endorsements to increase your credibility with larger buyers looking to switch from offshore partners.
  • List in procurement directories. Register with platforms and databases used by governmental agencies, prime contractors, OEMs, and large manufacturers looking to source from local or regional suppliers.

Rethink Your Supply Chain—Without Sacrificing Quality

The increase in steel and aluminum tariffs has hampered some companies that relied on imported materials, but those businesses that can pivot towards domestic suppliers, can mitigate the damage.

Steps to consider:

  • Renegotiate with suppliers. Build strategic partnerships with local mills or distributors who might offer volume discounts or payment flexibility to secure a long-term relationship.
  • Cooperate with other shops. Join or form co-ops or buying groups with nearby businesses to improve purchasing power and lower raw material costs.
  • Audit material specs. Determine which domestic alternatives can be used without compromising product integrity or customer standards. This probably won’t be an issue since most businesses choose to buy imported materials and products because of lower prices, not because of higher quality.

Invest in Operational Efficiency

If you can’t effectively manage your raw material costs, the next best way to protect your margins is by improving throughput, reducing waste, and automating repetitive tasks.

  • Upgrade equipment where possible. New CNC production capabilities, added robotics, larger booths and ovens, and conveyorized finishing system upgrades can help significantly reduce labor hours.
  • Adopt ERP and OEE software. Modern enterprise resource planning (ERP) tools can help even smaller businesses forecast demand, track materials, streamline quoting, and optimize scheduling. Overall Equipment Effectiveness (OEE) tools can identify performance bottlenecks and reduce downtime for companies of all sizes.
  • Lean manufacturing. Even a basic implementation of lean principles such as 5S, standardized work, and just-in-time production can reduce scrap, improve workflow, and lift profitability.

Add Value Through Secondary Services

In an uncertain or highly competitive landscape, the more value you can offer beyond basic production work, the more attractive you become to your customers.

Popular add-ons include:

Powder coating and paint finishing. Tariffs on aluminum and pre-finished goods have driven up demand for suppliers with in-house finishing capabilities. Savvy businesses use their ability to apply unique-to-market, custom, or extremely high quality finishes as a way to differentiate themselves from competitors.

  • Assembly and packaging. Help customers reduce handling and shorten their own supply chains by shipping finished assemblies or sellable products rather than just parts.
  • Design-for-manufacturing support. Collaborate with customers earlier in the design phase to recommend cost-saving tweaks and ensure manufacturability. Technical prowess and astute project management are valuable sales features.

Target Reshoring Manufacturers and Strained Industries

As big companies begin to reshore manufacturing in response to high import costs, they’ll need nimble, capable local partners. Focus your outreach and sales efforts on industries that are actively seeking domestic supply chain partners.

Hot segments include:

  • Aerospace & Defense: Despite the recent focus on reducing government spending, there’s a huge demand for domestically-provided parts and services in support of government aerospace and defense projects. Support contracts can be lucrative and somewhat insulated from consumer market volatility. As private companies continue to expand commercial space ventures, a similar demand for domestic components is likely.
  • Agricultural equipment: With many imported components now facing a 25% tariff, U.S. ag equipment makers are looking to domestic shops for components and finishing services. There’s also a growing refurbishment industry for big agricultural equipment. 
  • Consumer goods: Brands eager to highlight “Made in the USA” credentials are on the hunt for domestic metal parts and components. It makes sense that these domestically-sourced parts will need to be painted or powder coated in the US as well. 
  • Automotive: The Big 3, Japanese companies with established US plants, and electric vehicle start-ups are all looking for their suppliers to shift away from tariff-exposed materials and parts. The same goes for aftermarket companies that provide vehicle upgrade and customization components for automotive, commercial trucking, and recreational vehicle applications.

Embrace Flexibility as a Competitive Advantage

Unlike large, capital-intensive businesses that are burdened with high overhead and long project cycles, fabricators, coating businesses, and even midsize manufacturers can change direction more quickly and use their agility to:

  • Take on short-run jobs that larger companies might decline.
  • Offer custom prototyping, rush work, or repair services for customers that require special attention or fast turnarounds.
  • Experiment with new materials, equipment, or processes that might provide an edge in a disrupted market.
  • Look outside their comfort zone to build products for new applications or find work from unexplored market segments.

Plan for the Long Game—Don’t Just Survive, Strategize

The current tariffs are partially paused but may change for better or worse at any time. Use this moment to future-proof your business.

  • Don’t ignore technology. If your business has the financial means to do it, consider investing in fresh machinery or updated software. These purchases can increase your company’s productivity no matter how the economic climate changes.
  • Build cash reserves if possible. If you’re already benefiting from higher domestic demand, save strategically to enable near-term equipment and automation purchases while building a cushion against future price volatility.
  • Diversify your customer base. Don’t become too reliant on one industry or client. Spread your risk and revenue across customers from various sectors.
  • Monitor policy changes. Stay informed about tariff updates, USMCA modifications, and proposed legislation. Being proactive about how you operate your business will give you a major competitive advantage, especially against larger, less agile competitors.

We hope you’ve found this article informative. If your business is considering modernizing, expanding, or upgrading existing finishing capabilities, or if you’re considering bringing powder coating or paint finishing in-house, the experts at Reliant Finishing Systems can help. Give us a call at (256) 355-9000.