On May 23, 2025, McGuireWoods Consulting infrastructure and economic development team director Chris Lloyd was published in Institutional Investing in Infrastructure. The piece details how tariffs and supply chain disruptions will impact manufacturing development.
Lloyd discussed how the top question regarding the recent tariffs is their duration. The possible permanence of these change to United States policy ultimately dictates how much they will affect supply chain demands.
“If the tariffs are more short term or transactional, then international companies have fewer incentives to place manufacturing in the United States to avoid the tariffs,” Lloyd said. “Aside from that issue, the uncertainty related to tariffs is impacting the price of construction for both domestic and international companies, which could crimp capital spending plans.”
Lloyd analyzed the changes and differences in how domestic and international companies will proceed with manufacturing in the United States. He maintained that while both domestic and international companies anticipate increased costs, international companies need to consider whether manufacturing in the United States is a logical next step to combat these expenditures.
Additionally, the piece explores how proximity to transportation hubs and the skilled worker shortage paired with the tariffs will affect manufacturing development. Lloyd asserted that companies will prioritize automation in the manufacturing process and that proximity, while it aids in reducing transit costs, would present labor cost advantage issues.
Lloyd upheld that measures can be taken at the federal level to alleviate these potential supply chain complications.
“The most helpful action that could be taken at the federal level, short of certainty on future funding, would be regulatory streamlining and reform to allow projects to be developed more quickly and efficiently, and removing legislative roadblocks to innovative financing,” Lloyd said.
