Trend 2 Tariff Volatility Has Become The Industry’s Biggest Planning Challenge Prediction: Tariff volatility will remain the industry’s biggest planning challenge in 2026. While some lobbying partners report that tariff swings will be less severe in 2026 than they were in 2025, current signals suggest that uncertainty will continue through this year. According to recent discussions with PPAI’s government affairs advisers at Thorn Run Partners, several tariff actions are now in active negotiation at the federal level and policymakers are signaling interest in a more calibrated approach that avoids sudden shocks to import-dependent industries. “Tariff volatility has become a planning challenge rather than a cost challenge,” Bhat says. “In 2026, the firms that build flexibility into sourcing and pricing will stay ahead.” It could be argued that much of what firms are contending with in the previous trend stem from the current dynamic with tariffs. In general, tariffs have always influenced product costs, but in the past year they have become something far more disruptive and, ultimately, flat-out unpredictable. Beyond the tariffs themselves, the problem in 2025 really became an issue of unpredictability. Tariffs were threatened, walked back and sometimes enforced, then changed again. More than half of suppliers have moved part of their production into regions such as South America, India, Mexico or domestic partners in order to reduce exposure to China. Many discovered that diversification became complicated when countries like Vietnam and Cambodia were later hit with new or higher duties. What was meant to reduce risk often introduced new forms of risk, making long-term planning harder. • Suppliers report more inspection holds at Customs, more documentation reviews and more midstream reprocessing when tariff codes shift during production. • The federal government’s proposed Section 301 action on shipbuilding is a perfect example. It was originally set to be a $1 million fee for every U.S. port entry made by any China-built ship, regardless of ownership, before being suspended following objections from PPAI and a broad coalition of affected parties and industries. Caused some sourcing changes or delays Created major cost pressure and margin strain Limited but manageable impact No noticeable effect Benefited us, encouraged reshoring or regional diversification Source: PPAI 100 Supplier Sales Insights Have tariffs impacted your operations? 0% 15% 30% 45% 60% 3.6% 7.3% 30.9% 41.8% 52.7% PPAI • JANUARY 2026 • 43 2026 New-ish Trends | Must Read
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