Anyone else factoring tariffs or global supply-chain instability into manufacturing deals right now?

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October 24, 2025

by a searcher from Santa Clara University - Leavey School of Business in Texas, USA

Hello! — curious how everyone’s thinking about tariffs and global supply-chain instability during diligence these days. I’m looking at a components manufacturing company where a decent chunk of materials come from Asia, and I’m wondering how others are modeling that risk pre-LOI. Do you: 1. Build in a % hit to COGS or margin in your base case? 2. Treat it as a sensitivity scenario (e.g., +10% or +20% material cost)? 3. Or just keep it qualitative and bring it up post-LOI? Also wondering if anyone’s actually seen tariffs or trade shifts materially affect post-close performance (good or bad). Would love to hear how other searchers are handling this — especially those in aerospace, defense, or precision machining spaces.
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Reply by a searcher
from Missouri State University in North Canton, OH, USA
For me, pre-LOI it’s mostly a qualitative flag, but I’ll still do a quick sanity check. I’ll usually throw in a +10 or 15% landed cost bump on the Asia-sourced materials just to see what happens to gross margin and EBITDA. It’s less about precision and more about seeing how fragile the model is. And once you are under LOI, I look for domestic or nearshore opportunities (Canada or Mexico or even South America). I see tariff related dip in EBITDA, as a sign of fragile business, not necessarily as a line-item hit.
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Reply by a searcher
from Emory University in Tucson, AZ, USA
While our focus is on consumer goods, I’m happy to connect you with my partner as he manages our sourcing and tariff modeling plus has a long view given we’ve been dealing with tariff uncertainties since Section 301 went into effect the first Trump term.
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