Last month, President Trump announced he’s putting tariffs on steel and aluminum imports as part of his “America first” campaign promise to bring jobs back to the US. With a 25% tariff on steel and 10% tariff on aluminum, Trump says this will protect the US from foreign competition, but critics say this could escalate into a trade war. But, besides a trade war between the US and other steel-producing countries, the biggest concern for those in opposition of these new trade tariffs is the subsequent rise in costs for consumers. Their worry is that, while this move could boost US steel and aluminum manufacturers’ business, it could ultimately hurt the manufacturers the trade tariffs were created to protect.

How exactly does this actually impact American manufacturers across industries?

For the construction industry, Dodge Data Chief Economist Robert Murray says “not much” when it comes to construction costs. According to Murray, the trade tariffs are most likely just going to add to a trend of raw construction material price increases that have already been rising in the last year. But, as imported raw materials increase in price cross-industrially, it’s inevitably going to cost more to manufacture new goods and products across the board. From the steel used to build new automobiles, all the way down to the aluminum used in the canning of beer, the cost of creation is not only going to go up for the manufacturer, but, ultimately, for the end customer, as well.

A rise in costs almost always means a dip in net new sales, so, here’s where after-sales service proves its value: For most manufacturers, the initial cost of product sales is negligible in relation to the business gained through future service. This fact is exactly why modern companies should think of service as the new product, with a specific focus on maximizing product uptime. McKinsey and Company recently revealed that upwards of 15% of manufacturer’s total revenues come from parts and service, so, as changes like these proposed trade tariffs come about, product advancements alone will not enable manufacturers to gain or sustain the competitive differentiation needed to ensure long term financial performance.

Shifting from a product-led growth strategy – which has sustained manufacturers for many decades – to a service-led growth strategy will require them to embrace change, think differently, act differently, and embrace technology to completely transform their after-sales service functions. By keeping older equipment running with minimized downtime, and reducing organizations reliance on new product sales, after-sales service could be a key factor in keeping American manufacturers afloat amid rising tides of this impending trade war.