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Practical manufacturing procurement moves to outmaneuver tariffs
Issue 040
If you’re in procurement, you’re likely feeling the pressure from recent trade developments. As of March 12, 2025, the U.S. has imposed a 25% tariff on all steel and aluminum imports, including those from Canada. (Reuters) In response, Canada has enacted retaliatory tariffs on U.S. products. (Government of Canada)
These policy changes are disrupting supply chains and driving up costs, leaving procurement teams scrambling for solutions. But let’s be real—tariffs aren’t going away overnight. The best way to counter them? Smarter sourcing.
Here’s how you can mitigate rising costs, diversify your supply base, and secure pricing stability without sacrificing quality.
Renegotiate & Lock in Better Pricing
A sudden price hike from tariffs doesn’t mean you have to just accept higher costs. Strategic renegotiation with your vendors can help stabilize pricing and protect your bottom line.
Long-Term Pricing Agreements – If you haven’t already, now’s the time to secure multi-year contracts with your stamped parts and steel suppliers. This locks in predictable pricing and shields you from short-term tariff fluctuations.
Volume-Based Discounts – Bulk purchasing power matters. Consolidate your orders or negotiate price breaks based on total annual volume to get the best possible deal.
Flexible Payment Terms – Instead of paying upfront at new inflated prices, work with vendors to adjust payment schedules. Extending net payment terms or arranging installment payments can free up capital to absorb tariff-related cost increases.
Pro Tip: Approach renegotiations with data and transparency. Show vendors your projected demand, market insights, and willingness to commit to long-term partnerships. Many suppliers will offer creative solutions to keep your business.
Partner Up: Bulk Purchasing & Inventory Sharing
What if you could reduce your per-unit costs without switching suppliers? That’s where group purchasing and inventory collaboration come in.
Bulk Buying with Industry Partners – If you’re not placing massive steel orders alone, consider pooling orders with industry peers. Many manufacturers are forming buying groups to secure better rates from suppliers.
Vendor-Managed Inventory (VMI) – Some suppliers will hold inventory on your behalf and allow you to draw from it as needed—giving you cost predictability while reducing storage burdens.
Cooperative Stocking Programs – Larger manufacturers are partnering with regional suppliers to share steel inventory at pre-negotiated rates, preventing sudden price spikes and material shortages.
Pro Tip: Ask your suppliers about inventory planning programs to lock in predictable pricing and availability, even during market volatility.
Diversify & Source Smarter
If too much of your supply chain is tied to Canadian steel, now is the time to branch out and explore new sourcing options.
US-Based Steel Mills – Domestic suppliers like Nucor, U.S. Steel, Steel Dynamics, and Cleveland-Cliffs provide high-quality steel without the tariff risk.
Mexican Suppliers – Thanks to USMCA, Mexico remains a tariff-friendly source for steel and metal components at competitive prices.
Alternative Materials – If steel costs are unsustainable, consider switching to aluminum alloys, magnesium, or advanced composites. Many U.S. suppliers offer high-strength substitutes that reduce weight, improve performance, and avoid tariff costs.
Pro Tip: If you haven’t reviewed your supplier base in the past year, now is the time. Building relationships with multiple vendors across different regions protects your supply chain from sudden policy changes.
What’s Next? Future-Proof Your Supply Chain
The best procurement teams don’t react—they plan ahead. To stay ahead of tariff disruptions, make sure you’re:
✅ Building strong vendor relationships that foster flexibility and pricing stability.
✅ Exploring alternative sourcing options to reduce reliance on tariff-affected steel.
✅ Leveraging bulk purchasing & inventory planning to control costs.
✅ Considering material alternatives that lower dependence on high-tariff imports.
Now, let’s hear from you:
How have you successfully partnered with vendors to mitigate tariff costs? Drop a comment below! ⬇️
Gromax Precision Die & Mfg., Inc. specializes in designing and manufacturing precision metal stamped parts and tooling, including progressive stamping dies and custom equipment. With an on-time delivery rate of 99.68% and a defect rate of just 0.066%, the company ensures exceptional reliability and quality.
Gromax is ISO 9001:2015 certified and ITAR registered, serving industries such as medical, defense, aerospace, industrial automation, and automotive with high-quality, innovative solutions.