New Hampshire manufacturers are keeping close watch on how tariffs could affect their operations.

President Trump enacted tariffs on Canada and Mexico March 4, ending his monthlong suspension, and increased tariffs on China. The following day, the administration signaled potential exemptions for the tariffs against Canada and Mexico. Tariffs on European countries remain a possibility. The ongoing trade negotiations create uncertainty that weighs on manufacturers.

Potential benefits of tariffs include increased government revenue and making it easier for domestic businesses to compete with foreign competitors, protecting U.S. jobs. Potential cons are increased costs of imported goods, higher consumer prices and other countries responding with reciprocal tariffs as Canada, Mexico and China did.

The Business & Industry Association is the New Hampshire affiliate of the National Association of Manufacturers. In speaking with several of the state’s top manufacturing executives, it’s clear the recently reinstated 25% tariff on steel and increased tariff on aluminum imports from 10% to 25% are already having impacts.

A president of one manufacturer said aluminum is the go-to material for many of its applications and most of it comes from Canada. “We will have no choice but to raise our prices once the tariffs are in place,” he said. “We operate on slim margins and cannot absorb such drastic and meaningless increases.”

Another executive is increasingly concerned about inflationary impacts on its direct and indirect materials. The company sources most of its aluminum domestically and hasn’t been directly impacted by the tariffs, but expects to pay more as overall prices rise. “Other suppliers are using the current market climate as an excuse to push through higher prices,” she said. “We are anticipating raising our prices to offset higher costs, but are holding off until we get a clearer picture on the full impact.”

A third company builds aluminum components for a diversified base of U.S. manufacturers focused on industrial- and consumer-end markets. Its aluminum is sourced from a limited group of producers in the United States, Quebec and Middle East. The company’s president said aluminum import tariffs from the Trump administration’s first term included exemptions on primary and mill products from Canada, Mexico, the EU, Australia and Argentina. The new tariffs don’t at this point.

He points out that U.S. aluminum production has been in continual decline since the end of World War II as energy costs drove production to regions with excess energy. U.S. primary aluminum production currently accounts for approximately 25% of demand while key producing regions are China, the Middle East, Russia and Canada.

While he said the 25% tariff will impede aluminum mill product imports and create market expansion opportunities for some companies, higher costs may suppress overall market demand. He adds the tariffs are unlikely to spur U.S. aluminum primary production growth and further downstream production investments.

That was backed by two other executives. “To think tariffs will somehow stimulate U.S. manufacturing is folly,” one said. “Tariffs can change in a flash, but investments in U.S. manufacturing need stable policies and years to implement.”

The second said tariffs are designed to help domestic industries improve their competitiveness, but they must be predictable and long-term to justify required investments. “If not, they will fail to help domestic industry and instead prompt inflation,” he said, adding in some cases the industries tariffs are intended to help have already been destroyed so new tariffs do no good.

I spoke with another president whose company relies on steel for its manufacturing. He said the reinstated steel import tariff caused an immediate price increase from a U.S. supplier that processes a mix of domestic and international steel. He questions whether the 25% tariff will effectively protect domestic suppliers from international competition as steel costs vary quite a bit globally. “I suspect the reported value will fluctuate even more as some international manufacturers try to reduce the impact of the tariff,” he said.

Tariffs may also impact stainless steel, titanium and other materials used to manufacture components in the United States.

Whether manufacturers and the market can absorb increased costs from tariffs is just part of the unknown. “The lack of stability for us, I suspect, will be the most challenging thing,” an executive told me. “Planning capital investments based on tariffs, which may change in a couple of weeks, months or years, has a lot of risk.”

When implemented in a targeted, strategic manner, as the president did in his first term, the administration is correct that tariffs can address inequities with trading partners where the flow of goods is mostly one-way, and may spur further reshoring of U.S. manufacturing supply chains. However, as a manufacturing executive countered, imposing tariffs with limited analysis of the specifics with each trading partner will more likely increase consumer costs and risks slowing the economy.

Michael Skelton is president and CEO of the Business & Industry Association. Visit BIAofNH.com.