The organic balms and bug sprays that Badger produces at a facility in the Monadnock Region are built on a supply chain that spans the globe.
Essential oils are from India. Organic olive oil is from Spain. Organic beeswax is hard to find because everything growing within a couple miles of the hive needs to be pesticide-free; the Gilsum-based company sources it from places like Brazil.
That supply chain is now being challenged by President Donald Trump’s tariff policies. Imports from Brazil and India are subject to 50% surcharges. Spanish goods have been slapped with tariffs of 15%. And because of higher steel tariffs, the metal tins that some balms come in will each cost about 50 cents more.
“We will have paid around $350,000 in tariffs this year that were, of course, not budgeted,” says Badger co-CEO Emily Schwerin-Whyte.
As the Trump administration rolled out a series of new tariffs this year, many NH manufacturers say they’re starting to feel the effects in the form of higher costs for raw materials and a deepening economic uncertainty. Some are rethinking supply chains, stockpiling inventory and considering raising prices.
A few companies with almost exclusively domestic supply chains see opportunities in this new landscape, as customers seek out more U.S.-made and sourced goods. But most viewed the tariffs as a net negative.
Michael Skelton, president and CEO of the Business and Industry Association of NH, says one of the biggest challenges right now is uncertainty. The administration’s whipsawing changes on trade policies have left businesses uneasy about making hiring decisions, equipment purchases and other long-term investments.
“Anecdotally, what we hear is that businesses are moving those decisions down the road, and something that they might have been considering for Q3 or Q4 of this year, they’re going to push out into 2026,” he says.
Higher Costs, Supply Chain Adjustments
As tariffs make inputs more expensive, some manufacturers say they expect to increase prices. Badger hasn’t done so yet, but likely will next year, according to Schwerin-Whyte.
“We can’t sustain that level of increased costs without raising prices,” she says. “But we also have strong sales right now, and if we raise prices too much, we risk hurting our sales growth. So, there’s just a hard strategic decision of how much? Where’s that middle ground?”
Meanwhile, the business is also weighing other tradeoffs in response to tariffs, like whether aluminum bottles, which are more recyclable, will become so expensive that the company has to switch to plastic, despite its commitment to environmentally sustainable packaging.
Burgeon Outdoor, a small alpine-apparel company based in the White Mountains, is also bracing for the cost of some materials to skyrocket. The waterproof material used in rain jackets, for instance, can’t be sourced from the U.S., says founder Rudy Glocker.
Certain customers are willing to pay a premium for high-end outdoor apparel made in the mountains of NH, Glocker says, but only to a point. “If you raise those raw material costs too much, it almost makes it impossible for us to sell the product,” he says. “And then what’s going to happen is larger companies are just going to move their supply chains around and find a low-tariff jurisdiction.”
Burgeon “front-loaded” its production of waterproof items this year to avoid potential tariffs, he says. But that came with a cost, tying up a significant amount of working capital in inventory that wouldn’t be sold for another eight or nine months. “That’s a real effect on our business,” he says.
Keene-based Whitney Brothers, which makes furniture for schools and day care centers, is seeking backup suppliers so its supply chain is less vulnerable to price hikes and other disruptions. That’s easier said than done. Because the furniture is for young children, the materials must meet certain standards, like birch plywood that won’t splinter, says President Scott Kroeger.
Kroeger says costs have started increasing for some wood. It hasn’t had a dramatic effect so far, but that could change. “The challenge for us is just because of the changing situation, it’s really hard to do a whole lot of planning,” he says.
Rochester-based Albany International, which makes aerospace components and machine clothing at its 30 factories worldwide, has been “somewhat insulated” from tariffs so far in part because of its regionally-based supply chains and production, says President and CEO Gunnar Kleveland.
He’s more worried about the future of the United States-Mexico-Canada Agreement, which is up for review in 2026. If key parts of that agreement are rolled back, it would disrupt industries like aerospace, where production spans all three countries. “That would have an immediate impact on pricing, because nobody can survive taking those types of cuts to profitability,” he says.
The Cost of Tariffs
The instability caused by tariffs has already cost Peter Lehnen business. Lehnen Industrial Services is a small Keene-based firm that designs and builds industrial machinery for high-volume manufacturers. Lehnen says clients have canceled or delayed orders after unanticipated tariff costs upended their budgets.
“We have quoted a piece of equipment for a million dollars, just to use round numbers,” he says. “And the customer is saying, ‘No, I have to push this project into 2026 because I’ve had to pay $300,000 in tariffs this year.’”
“It’s just causing thrashing on everyone’s part, having to realign budgets, cancel contracts,” he says.
Lehnen says the company had plans to grow this year and add perhaps four or five new employees to its staff of 23. But it put those plans on hold given the uncertainty around tariffs. They’re working to expand their customer base so they can survive tariff-related upheavals.
“What we feel [is going to be] needed to ride this out is to have a diverse customer base,” he says. “So, when one customer decides to cancel $2 or $3 million dollars in orders, we can maybe have two or three other customers who could use our services and make up that shortfall.”
Some manufacturers have also noticed a drop in international demand. Both Badger and Burgeon Outdoor say their Canadian sales have taken a hit. A $50,000 order that Burgeon Outdoor had in the works with a customer in India was put on hold because of trade tensions.
Finding Opportunity
Some companies, including Len-Tex Wallcoverings in Walpole, see potential to gain more customers in the U.S. “About 25 years ago, we made a commitment here at Len-Tex to source all of our raw materials within the United States,” says President Don Lennon. “We have never imported, unlike most of our competitors.”
Lennon says that’s looking more like a competitive advantage compared to rivals that source fabrics from China and India. The company highlights its domestic sourcing and commitment to “supporting American jobs” in regular e-blasts, social media ads and other marketing. He thinks some customers may look to shift business to companies with domestic supply chains.
“Some market intel is that a couple of our competitors had the slowest second quarter in a few years,” Lennon says.
Can-One USA, an aluminum can maker in Nashua, is also positioning itself as a steady presence amid the tumult of tariffs. A division of Malaysia-based Can-One, the Nashua plant gets its aluminum from a supplier in Kentucky. “We’re promoting ourselves as the all-American can, made up here in New England,” says CEO Giovanni Di Mambro.
Di Mambro is hoping to attract more business from small and mid-size beverage companies seeking cost savings as larger competitors that use imported aluminum pass on those costs. “We’ve seen an uptick from throughout the United States of inquiries to see if we can supply cans and compete directly with the bigger companies,”
he says.
But shifting supply chains to the U.S. isn’t an option for every company. Eric Hui says he explored sourcing everything from the East Coast when he founded Somersworth-based outerwear company Terracea, but it would have at least doubled his costs. Countries like Vietnam and China have factories with the expertise and skilled labor to make technical outdoor apparel.
“Unless an entire industry is somehow brought back to the U.S. to retrain [the] labor force and get people interested in going back into technical cut-and-sew, it seems like it’s a pretty impossible endeavor,” he says.
Lehnen worries the long-term impact of tariffs will make American companies less competitive globally. One of the projects his company lost this year is being built in Ireland instead, he says.
“We’re not the only company that can design and build automated machinery,” he says. “We’re good at it, but there’s lots of people around the world who can do this and do this very well.”
