By Will Seel
VP of Business Development & Industry Affairs, FHI, LLC
Will helps supply chain leaders solve labor challenges with scalable, people-first solutions. As Vice President of Business Development & Industry Affairs, he draws on over 30 years of experience in logistics and distribution to guide companies through high-stakes operational shifts, delivering workforce strategies built to flex, scale, and perform.
U.S. tariffs have reshaped the supply chain landscape again. Since early April, sweeping policy changes have triggered new duties on imports, driven up costs, and forced businesses to rethink sourcing, labor, and logistics strategies. As companies adapt with reshoring, diversification, and new tech, one truth remains: none of it works without a skilled, flexible workforce. This blog outlines the updates and strategic responses that matter most to distribution and supply chain leaders.
1. Tariffs Are Back—and Bigger Than Before
In April 2025, the U.S. government rolled out a new series of tariffs under the “Reciprocal Tariff Plan.” Key developments include:
These measures aim to bring back domestic production—but the ripple effect is immediate: sourcing strategies are in flux, transportation costs are rising, and pricing decisions are under the microscope.
2. Supply Chain Disruption: What’s Actually Happening?
Import Pull-Forwards Then Cliff-Drops
Importers rushed to beat the tariff deadlines, with March container volume up double digits. But May is forecasted to drop more than 20% YOY. U.S. ports, especially on the West Coast, are bracing for reduced traffic and congestion.
Inventory Strategy Flips
Companies are leaning on stockpiled inventory while waiting out negotiations. Some may delay new imports, creating an artificial "quiet season" for ports and distributors.
Sourcing Shifts Accelerate
Expect continued movement away from China and toward Mexico, India, and Central America, especially for retail, tech, and apparel. Domestic suppliers are seeing a surge in inquiries, even if capacity isn’t fully ready yet.
3. How Industries Are Reacting
Automotive
OEMs are halting shipments from Mexico and Canada to reassess compliance and tariff risk. Stellantis paused U.S. assembly and announced layoffs. BMW and Ferrari announced price hikes, while others are absorbing costs temporarily. Expect North American production to become the long-term play.
Retail and Apparel
Major brands are renegotiating supplier contracts and exploring new countries. Tariffs as high as 49% on clothing are squeezing margins. Some fast fashion retailers are testing nearshoring to Central America.
Manufacturing and Industrial
Smaller domestic shops are seeing opportunity. Reshoring projects are in motion, but reshoring isn’t simple—it’s expensive, time-intensive, and requires skilled workers. Companies are balancing rising input costs with the hope of winning new “buy American” business.
4. Automation and Technological Investments: Enhancing, Not Replacing the Workforce
While some manufacturers are investing in automation and AI technologies to offset rising production costs, the most effective operations understand a key truth: technology is only as powerful as the people behind it.
Automation can streamline repetitive tasks, reduce errors, and improve throughput, but it also introduces new complexity. It demands a workforce that is trained, adaptable, and capable of operating and maintaining sophisticated systems. In fact, many companies are discovering that automation doesn’t eliminate the need for labor; it elevates it.
Forward-thinking supply chain leaders are now focused on:
At FHI, we understand this evolution. Our teams are already operating in some of the country’s most automated distribution centers—delivering not just labor, but the right mix of capability, accountability, and leadership that automation alone can’t provide.
The future isn’t human or machine; it’s human with machine. And it’s that blend of tools and talent that gives companies the competitive edge in today’s volatile environment.
5. Workforce Implications You Can’t Ignore
📌 At FHI, we help distribution leaders staff, manage and scale their operations without the guesswork. Our flexible labor models are built for today’s supply chain volatility, whether you're ramping up due to reshoring, launching full-service warehouse operations with on-site leadership, or navigating seasonal demand spikes with a trusted, managed solution.
6. What Supply Chain Executives Should Do Now
✅ Audit your sourcing and supplier diversity
✅ Update your tariff exposure risk map
✅ Build in labor flexibility, especially for frontline warehouse operations
✅ Communicate internally about the road ahead
✅ Partner with experts who understand the new landscape
Resilience Requires People
There’s no doubt the 2025 tariff environment is challenging but for those willing to adapt, it’s also full of opportunity. Success won’t come from a single solution. It will come from resilient supply chains, creative labor strategies, and trusted partners who can help you navigate uncertainty.
If you need a workforce solution that flexes with your volume and delivers results, FHI is here to help.
Need help managing your labor strategy in a reshoring environment?
Connect with FHI’s team today to learn how our managed supply chain workforce solutions can help you scale efficiently, reduce risk, and stay ahead of disruption.
If you need dependable support to reinforce your team and get you back on track, FHI NOW can help.
In any market, your supply chain can make or break your ability to compete well. Don't leave that to chance. We can help you create a stronger operation, so you never fall behind the competition.
Stop worrying about labor challenges and start enjoying a safe, lean, and rock-solid supply chain.
(800) 849-3132 | © FHI. All rights reserved.