Navigating the Turbulent Landscape of New Tariffs

Since the Trump 2.0 administration there has been a raft of escalating tariffs, particularly with China, that are designed to safeguard American Industry, Intellectual Property and Employment. While the exact status of the tariffs remains volatile, the global average effective US tariff rate stood at 15.8% by August 1, 2025, a significant increase from 2.3% at the end of 2024.

‍

The US economy has long stood as the global leading consumers and these recent tariffs are a measure to bring the balance of trade back in favour of America. Whichever side of the opinion polls you might sit on, the changes have caused many manufacturers to rethink supply chains, pricing and in many cases their overall trajectory. 

‍

Globalization has allowed consumers great choice at reasonable prices due to offshore mass manufacturing. But this has come at the expense of high carbon footprint, often poor human rights, concerns over quality or safety, environmental concerns and IP violations that have stifled development. 

‍

Since the increase in US trade tariffs, manufacturers are increasingly turning to Manufacturing-as-a-Service (MaaS) providers as a strategic solution to mitigate escalating costs and supply chain complexities. 

‍

MaaS offers a viable framework for addressing these challenges, serving as a key actionable strategy for North American or foreign manufacturers seeking a USA based manufacturing partner. Fundamentally, MaaS providers excel at finding the most cost-effective and best-suited manufacturing solution. 

‍

Key benefits of partnering with MaaS providers include:‍

• ‍Sustainable and Local Production: MaaS enables the production of parts and prototypes locally, which directly reduces shipping and transport costs, reducing carbon emissions. This localized approach is crucial in an era where consumers often prefer to "buy local" and where tracing parts and products is increasingly valued. For international brands, a US based manufacturing partner can allow them to retain their American market share and relevance despite the tariffs. 
• ‍Scalability and Flexibility: Businesses can procure only the parts they need and scale up or down based on business demand. This adaptability is vital in an environment marked by trade policy volatility and uncertainty, allowing manufacturers to pivot swiftly without committing to large capital investments or long-term production agreements.
• ‍Consultative Approach and Material Expertise: MaaS providers often offer invaluable advice on "alternative material selection and what type of machining best fits your use case.” This expert guidance is essential when considering materials like carbon fiber, which, while offering significant advantages, also requires specialised knowledge. Our in-house engineers and composites experts will always examine component designs and processes with the goal of optimizing quality, efficiency and delivery. 
• ‍Sourcing expertise and buying power MaaS providers tend to specialise in a small handful of materials. In the case of Peninsula Composites, our buying power of raw carbon fiber results in lower material costs, a saving which can be passed on to the client. 
• ‍Protection of IP MaaS providers like Peninsula Composites do not want to enter their clients’ markets. Robust legal mechanisms to protect a client’s investment in design and development are entered. Being under US law this is easily enforceable. 

‍

However, carbon fiber itself is not immune to tariffs. Raw carbon fiber, and epoxy resin systems were included in the Trump administration’s Section 301 tariffs, often ranging from 10% to 25%. More recently, tariffs on raw carbon fiber tow from targeted countries increased to 25% (from 7.5%), and on prepreg materials to 17.5% (from 4.2%). 

‍

A proposed Carbon Border Adjustment Mechanism (CBAM) could add another 8-12% to costs from countries with coal-dependent manufacturing like China. These tariffs have led to increased costs and price volatility for imported carbon fiber, with inflation-adjusted prices for tow prepreg in the U.S. remaining 10–15% higher than pre-tariff levels.

‍

Despite these tariffs on carbon fiber, MaaS providers, particularly those with strong domestic capabilities like Peninsula Composites, can offer competitive advantages. We can leverage our purchasing power, offsetting higher labor costs through volume discounts. Furthermore, our engineering expertise allows us to recommend optimizations such as material layups or choosing different exterior quills for better aesthetics and reduced painting labor, thereby finding solutions that are cost neutral or even a benefit. 

‍

This focus on competitive differentiation through innovation, quality, and process efficiency, rather than just price, becomes crucial in navigating the tariff landscape.

‍

MaaS, enables flexible, local sourcing and provides expertise in advanced material selection and custom manufacturing, serving as a critical strategy for manufacturers to navigate the complexities of tariffs. While material alternatives like carbon fiber offer performance benefits, MaaS helps to manage the associated costs and supply chain risks in a continuously evolving global trade environment.

‍

Peninsula Composites offers MaaS for both components and consumer products. For over 25 years our sister company, Offshore Spars, has been manufacturing yacht masts to the highest standard. Our processes are proven, efficient and cost effective. Our extensive, climate controlled, carbon fiber storage facility offers our partners the option to stockpile materials bought at preferable prices. 

‍

Contact us to discuss your project and how Peninsula Composites can help you continue to do business in the USA.