If there was one thing Rose Wood had been able to count on as a buyer at Pawtucket manufacturer Neocorp Inc., it was that prices for raw materials would increase each year, but usually in predictable amounts.
In 2025, that has gone out the window.
And the uncertainty is causing stress for the family-owned maker of standard and technical ropes and bungee cords.
“I used to know that the price of yarn was going to go up 5% every year,” Wood said recently. “But now … it’s really hard to plan when you don’t even know what materials are going to cost.”
Neocorp isn’t alone.
To varying degrees, manufacturers across the region have been grappling for months with the import tariff increases first enacted in April by the Trump administration. In many cases, the hikes on goods arriving from various countries have pushed costs on imported raw materials and components higher, caused supply chain disruptions, ramped up pricing pressures and created competitive disadvantages for companies doing business globally.
See related story: For Ward’s, survival of tariffs required complete overhaul of business
There’s a lot on the line for the local manufacturing sector.
Rhode Island is home to more than 1,400 manufacturers, employing nearly 40,000 people, says the R.I. Department of Labor and Training. With roughly $5.34 billion in annual output, according to federal economic data, Rhode Island’s manufacturing sector remains a major contributor to the state’s economy.
And many of those companies are under tremendous stress, according to a survey conducted in June by R.I. Commerce Corp., the Rhode Island Manufacturers Association and Polaris MEP, a nonprofit that provides industry support.
In the survey of nearly 100 Rhode Island manufacturers, 86% of respondents reported that tariff changes and uncertainty had raised the cost of making products, and 78% said they either have raised their prices in response or plan to soon.
In addition, 76% acknowledged that their profits have shrunk because of the tariff situation.
The level of hardship varied depending on what companies are producing.
Defense contractors stood out as less affected in their ability to fulfill contracts, according to the survey, with nearly 43% reporting a negative effect because of the tariff increases, with almost 58% of all other Rhode Island manufacturers saying there was a negative impact on fulfilling contracts.
At the same time, 93% of medical technology, life sciences and food manufacturers said tariffs were hurting their bottom lines, while fabricated metal manufacturers were comparatively less affected, with 64% reporting detrimental results.
“We had a lot of anecdotal evidence that Rhode Island manufacturers were beginning to suffer or anticipating hardship,” Matt Watson, director of Polaris MEP and the nonprofit 401 Tech Bridge, said at the time. “This survey captured the data [that] proves the scale is significant.”
[caption id="attachment_511246" align="aligncenter" width="1200"]
PARTS AND PARCEL: German robotics manufacturer igus GmbH owns a production and distribution facility in East Providence under subsidiary igus Bearings Inc., but the company acknowledges it can’t avoid paying higher tariffs as components arrive from overseas.
PBN PHOTO/MICHAEL SALERNO[/caption]
RIPPLE EFFECTS
Those hardships can be traced back to February, when President Donald Trump signed executive orders imposing new 25% tariffs on Canada and Mexico imports, and a 10% additional tariff on Chinese imports.
That touched off a trade war of words that includes pauses, revisions, exemptions and the enactment of various tariffs, including a 10% baseline tariff on most imports, plus country-specific “reciprocal” tariffs for dozens of countries.
There have been some positives from the tariffs.
The Washington, D.C., think tank Committee for a Responsible Federal Budget calculated that monthly tariff revenue had more than tripled between the end of 2024 to July, going from $7 billion to about $25 billion. At the same time, the U.S. trade deficit shrank as fewer imports were shipped here, and companies have announced hundreds of billions of dollars of investment in U.S. manufacturing, according to the Trump administration.
But observers say assessing the effectiveness of tariffs and their influence on the economy is much more complicated.
Take the 50% tariffs on imported steel and aluminum, which has certainly benefited domestic metal producers.
These materials don’t just affect the most obvious businesses, said Leonard Lardaro, an economist and professor at the University of Rhode Island.
“When you have tariffs on imports like steel and aluminum, that’s going to have ripple effects across industries,” Lardaro said, extending to companies that aren’t directly reliant on these components.
But repercussions are still murky, Lardaro said, partially because some businesses stockpiled certain materials in anticipation of the tariffs. But Lardaro expects that manufacturers who used this strategy will begin to run low on necessary supplies starting later this month or early in the new year, and they could begin passing on more costs to customers.
Adding a complication: An ongoing U.S. Supreme Court case could determine whether manufacturers levy these increases, Lardaro said. Trump enacted tariffs under the International Emergency Economic Powers Act, which allows a president to regulate international commerce in a state of emergency.
Small-business groups and a coalition of states, including Rhode Island, are challenging Trump’s emergency declaration and associated tariffs. If successful, the federal government will be required to refund about $90 billion in tariffs to U.S. importers.
But that process is expected to be lengthy, and it’s unclear how potential refunds would impact businesses and individuals.
Still, some businesses may be holding off on price increases in hopes that they’ll receive money back, Lardaro said.
UNCERTAINTY KILLS
Keeping up with the tariffs, constantly evolving regulations and ongoing legal battles can be a job in itself for workers at all levels of a company, according to Jacob Sanchez, who leads industry solutions and community development for igus Bearings Inc. in East Providence, the U.S. headquarters of the German robotics manufacturer.
Igus is in the process of expanding its East Providence footprint and adding new jobs, which Sanchez said is partially in an attempt to counteract tariff-imposed headwinds.
The local jobs will help igus balance supply chain risks, Sanchez said, but will not protect it from the brunt of tariff expenses. Those costs, ultimately, will be passed on to customers, he said.
“At the end of the day, there’s really no way to protect yourselves against the tariffs as a business,” Sanchez said. “There’s really no protection from the tariffs … because aluminum and copper don’t really come from the U.S.”
Erin Read, formerly a longtime spokesperson at Polaris MEP who now is marketing director for Nterprisers Inc., a Providence-based digital platform that connects manufacturers with supply chain and sales opportunities, said that Nterprisers’ clients are reporting similar hardships.
While the Trump administration has claimed that tariffs will encourage manufacturers to bring operations and jobs back to the U.S., Read said that’s not feasible for the majority of businesses.
“For most people, it is impossible to build an entire component from scratch with everything they could find here sourced in Rhode Island,” Read said. “We just don’t have that. They’re going to need to get metals from someone. They’re going to need to get components from someone.
“The uncertainty of it is what kills everyone,” she added.
Meanwhile, Lardaro said, the products that historically drove the Rhode Island manufacturing sector, such as jewelry, clothing and toys, are no longer the big moneymakers they once were.
“Once upon a time they were a big deal,” Lardaro said, but “I can’t imagine any circumstances, tariffs or not, where they’re going to go back” to former profitability levels.
Another impact of broader uncertainty falls on the labor market, Lardaro said. Under the full impact of tariff increases, companies may lay off employees as a cost-saving measure.
Lardaro expects that tariffs will ultimately settle at around 10%-15%, and that more stability would help restore hiring to previous levels. But with the use of artificial intelligence rising, Lardaro says it’s possible that employers could permanently replace some of the eliminated positions with automation.
“I really expect that manufacturing is going to become more automated, and that to some extent, tariffs are going to accelerate that as well,” Lardaro said.
CLIMBING COSTS
At Neocorp, Wood says the factory faces a skilled labor shortage, in part because the company uses specialized production processes to make its ropes and bungee cords.
The Trump administration’s immigration policies haven’t helped. Workers and businesses both face red tape in securing paperwork to allow people to work.
“There are a lot of first-generation immigrants doing this, and they’re super-hard workers,” Wood said. “They are integral to our companies, but you really have to know they have their paperwork. And even if they do, they might be too scared to show up for work.”
Nevertheless, tariffs remain the biggest uncertainty.
Because Neocorp manufactures most of its rope and bungee cord products in the U.S., the tariffs had the biggest effect on raw materials, such as the yarn it was importing from overseas. Still, keeping increased tariffs from hurting the bottom line has required different strategies.
The company has been closely tracking its profit margins on products and was able to hold its prices on some product lines while needing to raise them on others, “where it was unavoidable,” Wood said.
“We have also worked with new vendors coming from more tariff-friendly rates to fill the needs,” she said. “Over the year, we have not changed the products made or made any significant changes to our staffing.”
Now, even materials that would seem trivial to the average consumer are squeezing margins.
“Materials everywhere are more and more expensive. Even little things that you wouldn’t think about, like cardboard boxes [used to package and ship Neocorp products],” Wood said, noting that cardboard prices are 30% higher than last year.
“There are many issues coming down the line; in every area of the business, we are facing cost increases,” she said. “Basically, everyone in manufacturing is looking around saying, ‘What’s happening? How do we plan if we don’t know what our costs are?’ ”
