April 16, 2025 | BOMA International, Ella Krygiel
Recent U.S. tariffs are already affecting the manufacturing industry—especially in sectors like automotive, industrial equipment and electronics. According to SDI, materials such as specialty steel alloys are facing 20–35% tariff-driven price hikes, among other components. In response, companies are reevaluating their strategies to stay resilient and adaptable.
Mattie Mead, Hempitecture Founder and CEO describes his response to the tariff mandates and how his company is mitigating these effects. “When Hempitecture received over $8 million in funding from the Department of Energy in 2024, we began strategizing how to best utilize these funds to advance our ongoing decarbonization mission,” Mead says. “But as U.S. trade policies and federal funding pauses continue to shift, manufacturing companies across the country, Hempitecture included, are being forced to rethink short and long-term strategies.”
Mead isn’t alone in rethinking both short-term and long-term strategies. The second annual State of Supply Chain report from RELEX Solutions and Researchscape finds that 60% of companies aren’t just investing in technology as economic uncertainty intensifies – they’re fundamentally restructuring their supply chains. With RELEX stating that more than half of survey respondents cite “demand volatility” as their biggest challenge, companies are acting quickly to resolve these conflicts by expanding supplier networks, moving sourcing closer to home and accelerating automation investments.
“In this context, industrial real estate isn’t just a support structure—it’s a catalyst,” Mead says. “It enables agile, values-driven manufacturers like us to respond quickly to demand, scale responsibly, and deliver healthier products to market. It’s where innovation meets infrastructure.”
As of April 9, President Trump has paused planned tariff increases for most countries—maintaining the global 10% rate while freezing country-specific hikes for 90 days. However, J.P. Morgan still expects a likely contraction in real economic activity later this year.
Amid this uncertainty, the industrial real estate sector can act upon these changes by supporting manufacturers during times of policy changes. Mead expands on this: “Industrial real estate plays a critical role in providing stability and adaptability for manufacturers during times of economic uncertainty and policy shifts. As regulatory and market landscapes evolve—particularly in response to climate change and the push for decarbonization—facilities that can support the production of better, more ecological solutions become strategic assets.”
In other words, the more that facilities can position themselves as long-term strategic investments, the better. Sustainability, for example, continues to be a top consideration for companies preparing for the future. Boston Consulting Group predicted that this decade has the opportunity to see more low-carbon products and services on the market, so long as companies well-position the benefits that these materials have to offer to the consumer, such as health, safety and quality.
Hempitecture, a sustainable building material manufacturer that creates healthier alternatives to conventional, toxic thermal insulation, is a prime example of adapting to today’s economic climate. Hempitecture turns to other avenues, like including private sector investments, to continue its growth while supporting rural agriculture and blue-collar manufacturing jobs. “By expanding our existing product line and strategically entering new markets that demand sustainable solutions, the company is positioning itself for growth, regardless of policy fluctuations,” Mead says. “Collaborating with trade groups and turning to advocacy work are some of the next steps Hempitecture has explored as a way forward, further building on the momentum their company has seen after receiving merit-based grants.”
Building strong supplier alliances and developing joint mitigation strategies with key partners might be key to navigating the current tariff landscape, according to SDI. They outlined tips for creating a successful “response framework” amid operational challenges, such as geographic diversification, nearshoring partnerships and AI-powered analytics.
Mead sees AI as another key force shaping the industry: “As AI rapidly transforms nearly every industry, we’re seeing the world’s leading tech companies invest billions into infrastructure—especially data centers—which are resource-intensive, high-performance environments requiring next-generation building solutions. For example, companies like Microsoft are setting out to reduce the carbon footprint from their data centers with more thoughtful material choices. This shift presents a huge opportunity for industrial real estate to evolve into something smarter, cleaner and more resilient.”
As trade pressures and policy shifts continue to shape the manufacturing landscape, adaptability, innovation and strategic infrastructure will remain central to long-term resilience.
Interested in more content like this? Read our recent articles, How to Meet Data Center Demand Successfully or Experts Discuss Impact of Tariffs on CRE. You can view all this content and more when you click here to sign up for our Industrial newsletter!