For a while, tariffs were treated like another disruption manufacturers had to get through. In 2026, that thinking has changed. If tariffs are part of doing business for the foreseeable future, manufacturers can't keep treating them like an exception. They need to factor them into how they source materials, manage inventory, price products, forecast margins, and plan for what comes next. Effective tariff management starts with visibility.
How Are Manufacturers Responding to Tariffs?
86% of U.S. executives surveyed by PwC now expect tariffs to remain a “permanent planning assumption.” Manufacturers aren't waiting around for trade policy to become predictable again. They're changing their supply chains, and according to research cited in Sage's 2026 manufacturing trends report, 74% of executives are reshoring or planning to reshore operations. Organizations are also reducing the global distribution of Tier 1 suppliers and turning to dual sourcing as a buffer against disruption rather than relying exclusively on just-in-time models.
That creates a new balancing act. A lower-cost supplier isn't necessarily lower cost once tariffs, lead times, and inventory requirements enter the picture. There isn't one right sourcing strategy anymore. The challenge is having enough visibility to know which option makes the most sense for your business.
What Are Tariffs Doing to Manufacturing Costs?
Manufacturers were already dealing with tight margins, rising costs, and volatile supply chains. Tariffs add another moving target. That's one reason 76% of manufacturers are planning price increases in 2026 and beyond as they rethink pricing models and supply chains, but simply raising prices isn't much of a strategy. Raise them too little, and you absorb the additional cost. Raise them too much, and you risk losing business.
The bigger problem with tariff management is that traditional, static cost calculations can become outdated quickly. If the cost of a material changes, you need to understand what that means for the finished product, your margins, inventory strategy, and customer pricing. Equation's Sage 300 manufacturing data sheet points to rising labor and insurance costs already compressing manufacturers' margins, while tariff changes and geopolitical conflicts continue to create supply-chain volatility. So, yes, you can raise prices, but by how much? That's where things get complicated.
That's where scenario planning becomes important. Instead of reacting after costs change, you can model what happens if a material jumps another 10% or if you move a portion of your purchasing to another supplier. The goal isn't to predict exactly what tariffs will do next. It's to know what you'll do if they change.
Why Doesn’t Static Planning Work in a Tariff Environment?
Tariffs create a problem that traditional cost calculations aren't particularly good at handling: the numbers keep moving. In fact, more than half of U.S. companies (57%) reported declining gross margins as a direct result of tariffs. A material cost changes, and suddenly the assumptions behind your margins, inventory strategy, and customer pricing may be outdated. That's why manufacturers are moving toward scenario-based planning rather than relying on a single forecast.
Instead of trying to predict exactly what tariffs will do next, you can model the possibilities. What happens if a key material increases another 10%? What if you shift some purchasing to a second supplier? The goal isn't to predict every tariff change. It's to know what you'll do when one happens.
How Can an ERP Help Manufacturers with Tariff Management?
A modern ERP gives finance and operations real-time visibility across procurement, inventory, production, and shipping, so you can re-source materials, adjust production, or rethink inventory before a cost change shows up as a margin problem at month-end. It also connects production, cost accounting, procurement, and sales data. This makes scenario-based planning and dynamic pricing much more practical than trying to piece together the impact from separate spreadsheets.
For small and midsized manufacturers, Sage 300 brings those pieces together. Real-time dashboards and dimensional reporting help you understand what's driving profitability, while better visibility into materials procurement, work in progress, BOM aging, manufacturing quotes, and transaction history helps operations see what's happening further upstream. EDI integration can also improve information flow with suppliers and trading partners.
Marathon Brake Systems is a good example of that foundation in practice. The manufacturer used Sage 300 to improve component-level inventory tracking, while custom SQL views gave the team better production-planning capabilities. That's not specifically a tariff story, and we don't want to pretend it is, but it illustrates exactly the kind of visibility manufacturers need when sourcing conditions change.
For a more tariff-specific example, one manufacturer worked with Log-hub to automate tariff management and compliance by connecting bill of materials, transport, and trade data. As a result, the organization reduced tariff reporting from 16 hours to just two per cycle, avoided import blocks, and saved millions in unnecessary tariff costs.
There’s a compliance piece, too. Sage AvaTax, powered by Avalara, can automate product classification, tax calculations, returns, exemption certificate management, and tax documentation and reporting across jurisdictions, taking more of the manual work out of an already complicated environment.
Plan for Change, Not a Specific Outcome
No one knows exactly what tariffs will look like six months or a year from now. That's the point. Manufacturers don't need to predict every change. Good tariff management is about having the visibility to understand the impact, model their options, and adjust quickly when something changes.
We work with manufacturers and distributors to understand where their processes and systems are making tariff management harder than it needs to be. If you're wondering whether Sage 300 can give your team better visibility into inventory, costs, profitability, and planning, let's talk.