PMMI Town Hall: Managing Uncertainty as Tariffs Impact OEMs

The panel was surprised right away when a survey of webinar attendees revealed that many companies in attendance had not felt an impact on their business yet. Van den Pol was particularly surprised, as Royal Apollo had been affected from the start of the year. She fears a completely unstable global economy if President Trump imposes tariffs on Europe, as he has threatened.

Major agreed, citing how Urschel has enjoyed a lot of success in Europe and China in the past few years and anticipates that slowing up due to tariffs.

“It’s just inevitable,” he said. “In China, I think our tariff level will probably approach 35% before the year is over, and that is almost unworkable to sell into because Asia, in general, is very price sensitive.”

Uncertainty is paralyzing

“Businesses hate uncertainty,” Major said, “adding that uncertainty causes businesses to pause, which companies surveyed on the webinar agreed with. Attendees responded that their international customers admitted to pausing orders or withholding orders altogether, specifically because of the ambiguity around tariffs. Major’s biggest concern right now is that projects will dry up because both sides of the table “just have no idea how this is going to impact individual business.”

In the short term, he foresees situations where it might be necessary for OEMs to absorb costs caused by tariffs for the sake of maintaining customer relationships.

Remain nimble

To address these challenges, companies are focusing on flexibility and open communication. Some diversify their supply chains by sourcing from multiple regions to reduce dependency on any single market. This approach allows them to pivot quickly in response to changing tariff landscapes. Maintaining transparent communication with suppliers and customers is crucial to managing expectations and navigating cost-sharing arrangements.

Since this isn’t the industry’s first encounter with Trump-imposed tariffs, Van den Pol urged OEMs to be flexible in as many aspects of their business as possible. Royal Apollo is fortunate to have developed manufacturing facilities on three continents, which has aided its ability to mitigate supply chain costs.

“We are way more doing dual sourcing in different continents to make sure that whatever happens, whether it is tariffs or anything else that happens in the uncertain world that we live in right now, that we are covered,” she said.

Suppliers are advised to stay informed about tariff classifications on PMMI’s Global Trends blog, which is updated weekly with highly detailed input from Jarosz, providing specifics on each tariff’s impact and specific ways tariffs will impact packaging and processing machinery.