How Businesses Are Navigating Tariffs, Trade Uncertainty, and Location Decisions


December 23rd, 2025

tariffs and site selection

How Businesses Are Navigating Tariffs, Trade Uncertainty, and Location Decisions

In today’s global economy, change is constant. Shifting trade policies, evolving supply chains, and market volatility are shaping how companies plan for growth. One topic that continues to influence these conversations is tariffs and site selection — not as a political issue, but as a practical business consideration.

For companies evaluating where to invest, expand, or relocate, the question is no longer whether uncertainty exists. The real question is how to plan effectively despite it.

Insights from economic development and site selection professionals show that while tariffs introduce complexity, they are just one piece of a much larger decision-making framework.

Tariffs as One Variable in a Bigger Business Equation

Tariffs are not new. What has changed is their scale, frequency, and interaction with other economic pressures. Instead of viewing tariffs in isolation, businesses increasingly assess them alongside:

  • Labor availability and cost

  • Energy reliability and pricing

  • Infrastructure capacity

  • Supply chain resilience

  • Access to markets and customers

Because these factors are deeply interconnected, tariffs rarely determine outcomes on their own. Instead, they influence timing, risk tolerance, and short-term tactics while long-term strategies remain rooted in fundamentals.

Why Some Projects Move Faster While Others Pause

Interestingly, trade uncertainty has produced two opposite reactions in the market.

Some companies are accelerating decisions, choosing to move forward rather than remain on hold. Others are taking a more cautious approach, delaying investments until costs and policies stabilize.

Both responses are rational. The difference often depends on a company’s financial structure, customer base, and exposure to international supply chains. For example, firms serving domestic markets may feel less pressure than those reliant on imported equipment or materials.

What remains consistent is that location decisions are rarely reversed quickly. Real estate portfolios, workforce pipelines, and infrastructure investments are designed for decades, not months.

Short-Term Flexibility Without Long-Term Overreaction

To manage uncertainty, companies are using practical, non-disruptive tools rather than dramatic shifts. Common strategies include:

  • Adjusting inventory levels to absorb short-term cost swings

  • Leasing facilities instead of purchasing to preserve flexibility

  • Evaluating alternative suppliers where feasible

  • Using foreign trade zones to better control tariff timing

These approaches allow businesses to remain operational while avoiding decisions based solely on short-term volatility.

Workforce and Infrastructure Still Matter Most

Across industries, one message remains clear: workforce availability and infrastructure readiness continue to outweigh tariffs in site selection decisions.

Even when cost pressures exist, companies cannot operate without skilled workers, reliable utilities, and efficient logistics. Communities that invest in workforce development, infrastructure capacity, and responsive permitting processes remain competitive regardless of trade fluctuations.

This reinforces the importance of economic development fundamentals. Strong communities offer predictability, partnerships, and problem-solving capacity — qualities that matter even more during uncertain times.

What This Means for Communities and Economic Developers

For communities seeking to attract and retain investment, the takeaway is reassuring. Trade uncertainty does not eliminate opportunity. Instead, it elevates the value of collaboration, flexibility, and communication.

Economic developers who stay informed, listen to existing businesses, and adapt support strategies are best positioned to help companies move forward. The fundamentals of site selection have not changed — but the pace and complexity have.

In an evolving global environment, resilience comes from preparation, not prediction.

Conclusion

Tariffs and trade uncertainty are part of today’s business landscape, but they are not insurmountable barriers to growth. Companies that focus on long-term fundamentals while managing short-term risks continue to invest, expand, and create jobs.

Likewise, communities that prioritize workforce, infrastructure, and partnership remain strong contenders for future investment — regardless of what tomorrow’s headlines bring.