By Swathi Mohan (Leanacle) & Igor Chigrin (International Expansion Expert)
Introduction: The Tariff Tightrope
Tariffs are like that unexpected pothole on your daily commute: jolting, annoying, and potentially expensive if you don’t have shock absorbers. For manufacturers, tariffs can throw off budgets, pricing, and entire supply chains.
But there is a way to bounce back. Two powerful strategies can help:
Lean Manufacturing, the art of doing more with less (without losing your sanity or your socks on the shop floor).
International Expansion, aka “Let’s not put all our eggs in one customs basket.”
Together, these strategies help manufacturers sidestep tariff traps, improve margins, and build global resilience.
1. Bottlenecks: The Sneaky Culprits
Ever been in a grocery line where everything grinds to a halt because someone forgot their PIN? That’s your bottleneck.
Lean Tip: Use the Theory of Constraints to find and fix that “forgot PIN” moment in your process.
Daily Move: During your morning huddle, ask: “What slowed us down yesterday?” (Bonus points if someone says, “Steve’s lunch break turned into a vacation.”)
2. Inventory: It’s Not a Security Blanket
Tariffs make imported goods pricier. Holding more inventory “just in case” feels safe, but it’s expensive insurance.
Lean Tip: Embrace Just-in-Time and Kanban. Let your floor breathe!
Daily Move: Use a simple Red-Yellow-Green board to track material levels. If everything’s red… someone’s been asleep at the switch.
3. Efficiency: Shave Time, Save Dollars
Like trimming a beard with laser precision, Lean helps cut the fluff: cycle times, changeovers, defects.
Lean Tools: Standard Work, SMED, Kaizen (your triple-shot espresso for productivity).
Daily Move: Try a 5-minute Kaizen Moment in your huddle. Ask: “What silly thing wastes your time every day?” (Expect rants about printers and broken tape dispensers.)
4. Don’t Go It Alone: Leverage Supplier Strength
Tariffs often hit upstream, making supplier delays and price hikes feel like surprise plot twists in a drama series. But strong supplier partnerships can cushion the blow.
Lean Tip: Channel your inner Genchi Genbutsu, go see the problem. Visit suppliers, understand their constraints, and work together on solutions.
Daily Move: Dedicate one huddle a week to supplier check-ins. Ask frontline workers: “Any recurring hiccups with parts or deliveries?” You’ll get gold like “That bracket always arrives late or upside down.”
5. Flow: Because Traffic Jams Don’t Belong in Factories
Optimizing one workstation while the rest of the line chokes is like having a Ferrari stuck behind a tractor.
Lean Tip: Think Heijunka (leveling) and Takt Time. Sync to demand, not to one superstar machine.
Daily Move: Start a “Production Pulse” segment in huddles. “Orders are up 15% this week. Folks! No more Netflix pace today!”
6. People: Your Best Cost-Cutters Aren’t in Finance
You don’t need a six-sigma black belt to spot waste, just someone who’s been tripping over the same box for 3 weeks.
Lean Tip: Engage your frontline. Toyota’s magic isn’t robots, it’s people with brains and brooms.
Daily Move: Listen! Huddles are not a platform for leaders to rant. It’s a 2-way street, employees voice their opinions and leaders provide direction. Encourage your leaders to practice active listening and witness the magic unfold.
Supply Chain Strategy for Tariff Resilience
If you are a manufacturer, you most likely rely on foreign suppliers. Usually, it is an advantage because foreign suppliers provide you with the pricing advantage or parts, components or materials not available in your home country. But this advantage becomes a disadvantage in times of tariff wars. If your supplies are critical and subject to punitive tariffs or counter-tariffs (surtaxes), it can devastate your business, cash flow and profitability. Even though there is no universal workaround for tariffs, use the following steps to make your supply chain more resilient.
1. Assess the Impact
You won’t know the impact of tariffs until you know exactly which of your imported parts, materials and components they apply, the tariff rate and the dollar amount of customs duties. So, you need to break down your annual supplies by product code (HS Code), country of origin, volume and value. This way, you’d immediately identify which of the supplies are impacted by tariff wars and can make fact-based decisions. What if only 1% of your supplies is subject to tariff? Do you really need to do anything with it, or can you just “eat” the increased expense?
In Canada, the government published two lists of goods subject to the Canadian counter-tariff: List 1 and List 2. You need to know the HS Code of your components, parts or materials to check if the 25% tariff applies to them.
2. Diversify Suppliers
If the impact of tariffs on your supply chain is severe, consider diversifying your suppliers. Bringing production to your facility (onshoring) may seem like an obvious solution, but it is not always possible due to the nature of the supplies, or feasible from the capital and labour cost perspectives. So, in most cases, your best strategy is to look for suppliers in the alternative countries of origin that are not subject to tariffs.
Canada, for example, has free trade agreements with about 50 countries, including Mexico, all European countries, many Latin America and Caribbean countries and fast-growing economies in the Asia-Pacific region. It means that if you buy goods in those countries and import them to Canada, there will be no tariff in most cases.
Look for alternative suppliers in those countries first using trusted information resources, such as bilateral chambers of commerce, trade promotion agencies in those countries or industry associations of your suppliers. Chances are you will get contacts of legitimate suppliers through those sources vs trying to find someone on Google or social media.
When you find a new supplier, get their quote and samples and complete due diligence.
3. Pass on to or Share Extra Costs with Customers
In many cases, you may be unable to find alternative suppliers at all or quickly enough to avoid the tariffs. In this case, consider passing on extra costs to your customers by raising your prices or sharing tariff expenses with your customers.
Nobody wants to pay more, but the business community is in one boat with you, so people generally understand the problem and cooperate with each other.
4. Access Government Tariff Refund and Relief Programs
Lastly, the governments take the money from customs duties but then release it back to the business community through Tariff Remission and Customs Duty Drawback programs. These programs require application, and in most cases, you still need to pay the duty in full to qualify for them. But these programs are great legal opportunities to get duty refunds you paid on the imported materials, parts, and components.
Each of these programs has a long list of qualification requirements and conditions and may not apply to you, so we strongly recommend discussing them with your trusted international trade professionals before applying.
Final Thoughts: Tariff-Proofing the Smart Way
Beating tariffs isn’t just about cutting corners! it’s about building a smarter, leaner, and more agile operation. Combine that with global expansion strategies from experts like Igor, and you don’t just survive, you scale!
Want help kicking off your first huddle or looking for global diversification strategies? Swathi and Igor have your back, just not your inventory.