A new supply chain survey by CNBC shows that if President Trump's tariffs cause major Asian countries to lose some manufacturing, then American manufacturing will not be the main beneficiary.

Difficulty in relocating to the United States

The Trump administration has stated that a wave of relocation is imminent, but most surveyed companies say that bringing their supply chains back to the United States could double their costs and therefore will begin seeking a low tariff system globally.

More than half of the respondents (57%) stated that cost is their primary reason for not transferring production back to the United States; 21% stated that their primary reason is the challenge of finding skilled labor. The Trump administration has promised tax cuts for companies relocating manufacturing back to the United States, but surveys have found that taxes (14%) rank lower in the ranking of factors affecting manufacturing location decisions.

Although the technology industry has recently released some notable news, including Nvidia's plan to build a supercomputer factory in the United States and Apple's commitment to invest $500 billion in the US, most companies believe that the cost is too high. The Trump administration suspended the imposition of new tariffs on the technology industry in China and other global manufacturing countries last Friday, but the White House is advancing a national security investigation into key technologies for future tariffs.

Overall, most respondents estimate that the price tag for establishing a new domestic supply chain is at least twice the current cost, or possibly more than twice. 61% of respondents stated that it would be more cost-effective to transfer their supply chains to countries with lower tariffs rather than returning them to the United States.

In addition to tariffs, consumer demand and raw material prices, as well as the inability of the current government to provide a consistent strategy, are considered major issues in the supply chain.

When asked if they felt the Trump administration was "bullying the American business community," the majority of respondents (61%) answered "yes.

This survey was conducted from April 14th to 18th, with a total of 380 respondents from supply chain companies and business organizations participating, and 120 respondents answering each question.

Among the respondents who expressed interest in rebuilding the US supply chain, 41% said it would take at least three to five years, and 33% said it would take more than five years.

Automation will dominate

If manufacturing returns to the United States, automation will become an important component of the economic model, with 81% of respondents stating that they will use automation more than manual labor.

Mark Baxa, CEO of CSCMP, a supply chain trade group, said, "When considering relocating back to the United States, the US labor market is a concern

In the current environment, layoffs are an urgent issue, with almost half of the respondents (47%) indicating plans to lay off employees and 53% indicating no current plans to lay off employees. For a more common question of how long companies will wait to make personnel decisions, most people say it will not exceed 9 months (38% say it will be within two to three months; 23% in the next three to six months).

A survey released by the Federal Reserve on Monday showed a surge in concerns about layoffs.

Currently, 89% of respondents indicate that the most common response to Trump's tariffs is to cancel orders and expect consumers to reduce spending (75% of respondents say they are predicting this). Regarding products entering the United States under the new tariff rates, 61% of respondents stated that they will increase their prices.

Baxa said, "The direct impact is the risk of order cancellations and a decline in consumer spending, which deserves attention

Respondents expect that the products most severely affected by consumer spending cuts will be non essential products (44%), furniture (19%), and luxury goods (19%).

Paul Brashier, Vice President of Global Supply Chain at ITS Logistics, said, "So far, we have seen a high rate of cancellations or suspensions of shipments from major Asian countries, but there has been an increase in shipments and pre shipment volumes from other Asian countries with equivalent tariffs suspended for 90 days

Supply chain issues recession warning

63% of respondents warn that this year's economic recession will affect the US economy due to Trump's tariff policies, and approximately half (51%) of respondents expect consumer spending to decline in the second quarter.

Kevin Hassett, the director of Trump's National Economic Council, said on Monday that more than 10 countries have proposed "amazing" trade deals to the United States, and he "100%" guarantees that there will be no economic recession.

Multiple surveys targeting CEOs have shown that people generally expect an economic recession to have already begun or be imminent. BlackRock CEO Larry Fink stated that based on his conversations with CEOs from various economic sectors, the United States is either very close to a recession or has already fallen into a recession.

Small businesses and startups say that tariffs would be catastrophic and put American employment at risk.