Manufacturing and Shipping in a Tariff World: New Challenges for Aftermarket Brands
The motorsport, performance, and aftermarket industries have long depended on speed, precision, and supply chain efficiency. However, over the last several years (and especially these last 100 days), persistent tariff actions and an increasingly volatile global trade environment have created challenges far beyond rising material costs. Today, business leaders face a new operational reality: maintaining margins, controlling customer expectations, and safeguarding supply chains amid unpredictable global pressures.
The evolving tariff landscape, initiated under the 2018 Section 301 actions, sustained with minimal relief during the Biden administration, and now escalating again under the current administration, continues to fundamentally reshape how brands must operate.
How Aftermarket Companies Are Adjusting Manufacturing Strategies to Cope with Rising Tariffs
For performance aftermarket companies, managing rising tariffs isn’t simply a matter of manufacturing domestically. It starts with securing specialized raw materials (particularly steel, aluminum, carbon fiber, and electronic components) which remain largely sourced internationally despite efforts at reshoring (U.S. International Trade Commission, 2022).
Managing Material Cost Volatility
The introduction of Section 301 tariffs imposed duties of 10%–25% on critical imported goods, instantly driving up the costs of key manufacturing inputs. Even brands committed to U.S.-based machining and assembly felt immediate financial pressure, as imported billets, tubing, and composites arrived at inflated prices (Reuters, 2019). This shifted fundamental cost structures, forcing difficult decisions between margin compression and price increases at a time when customer sensitivity to value remained high.
Diversifying Sourcing to Reduce Exposure
In response, many companies began diversifying their supplier bases across Southeast Asia and Europe, targeting regions less exposed to U.S. tariffs. However, sourcing diversification introduces additional logistical, compliance, and quality control challenges. Manufacturers must now actively manage multi-region supply chains to stabilize costs and ensure supply continuity, increasing operational complexity across the board.
Building Strategic Flexibility
Given the ongoing volatility in global trade policy, reliance on single-source suppliers, even outside of China, is now a material business risk. Brands are increasingly investing in flexible, multi-region sourcing models to enable rapid pivots when tariffs shift or new supply disruptions arise. Maintaining redundant vendor relationships is no longer excess overhead; it is a requirement for operational resilience.
Shifting Production to Avoid Tariffs
For many brands, adjusting sourcing alone is not enough. Production strategies themselves have been overhauled to minimize tariff exposure while maintaining product availability and cost competitiveness.
Leveraging Near-shoring for Cost Control
Mexico has emerged as a key manufacturing and final assembly hub for many aftermarket companies. Under the United States–Mexico–Canada Agreement (USMCA), products produced or significantly transformed in Mexico can enter the U.S. market with reduced or no tariffs (Office of the U.S. Trade Representative, 2020). By relocating finishing operations (including machining, coating, or assembly) companies can better control costs while maintaining North American supply chain proximity.
Balancing Regional Risk
Southeast Asian countries like Vietnam, Thailand, and Malaysia initially provided relief from Chinese tariffs. However, recent political and trade tensions have introduced new risks in those regions. Brands relying too heavily on a single country for production now face renewed uncertainty, leading to broader geographic diversification of manufacturing footprints to hedge against regional instability.
Managing Production Agility
Flexibility is critical. Smart companies are adopting agile production models, operating smaller, geographically distributed facilities capable of rapid scaling or retraction based on real-time tariff, shipping, and regulatory shifts. Static, centralized production strategies have been replaced by networked, decentralized models optimized for resilience rather than pure efficiency.
Managing Shipping and Customs Risks
Beyond sourcing and production adjustments, logistics and customs management have become increasingly complex and unpredictable.
Escalating Freight and Compliance Costs
While container rates have normalized somewhat since pandemic peaks, shipping costs remain elevated compared to pre-2018 levels. Coupled with tariffs applied at the port of entry, landed costs on critical parts, from lightweight body panels to complete suspension systems, remain significantly higher than historical norms (Freightos Baltic Index, 2024).
Moreover, tightened customs enforcement requires complete, accurate compliance documentation. Certificates of origin, tariff classifications under the Harmonized Tariff Schedule (HTS), and detailed product descriptions must be flawless to avoid costly delays, inspections, or penalties.
Navigating Customs Volatility
Recent surges in tariff announcement activity have overwhelmed key U.S. ports, creating customs bottlenecks even for goods not directly affected by new trade actions. This unpredictability has direct consequences for aftermarket brands operating D2C models, where consistent fulfillment and short delivery windows are critical to customer retention.
Brands that rely on just-in-time inventory systems are increasingly vulnerable to sudden disruptions. Forward-thinking companies are now implementing expanded inventory buffers and strategic domestic warehousing to maintain fulfillment reliability despite customs volatility.
Staying Flexible
The motorsport, performance, and aftermarket sectors are now operating within a highly unpredictable global trade framework. Tariffs and customs volatility are no longer temporary disruptions… they’re ongoing variables that impact every layer of the supply chain. For business owners and leadership teams, this means manufacturing and logistics can no longer be viewed purely through a cost lens; they are now strategic levers of risk mitigation and customer retention.
Companies that proactively adapt to this environment (with diversified sourcing, agile production, and logistics strategies built for disruption) are the ones best positioned to protect margins and meet customer expectations. Those that don’t will continue to face material exposure to cost spikes, fulfillment delays, and operational bottlenecks that directly impact brand trust and growth.
Stay tuned for Part 3 of our series, where we’ll dive deeper into how brands can future-proof their operations and customer communications in an era of relentless trade disruption.
Where Do You Go From Here?
At Pitlane Media & Marketing, we work exclusively with brands in the performance and motorsport space; and we understand the business pressures you're navigating. We help companies like yours translate operational realities into marketing strategies that build trust, drive sales, and support long-term growth.
Whether it’s repositioning messaging around shifting product availability, launching a line built around new regional sourcing, or strengthening customer communication during volatility, we help you stay ahead.
Let’s talk. We’ll help your brand stay competitive, credible, and clear… even when the market isn’t.
