The Potential Impact of Tariffs in the Recruiting Space

At the time of publishing, as the new administration takes control of the White House, there is a lot of focus on tariffs and what bearing they may have on businesses around the country – and the circumstances change daily.

At TZR, we look at this from three angles – the potential impact on the industries in which our clients operate, the broader impact on the recruiting space at large, and what history can teach us.

What are tariffs?

To start, a quick economics lesson for those who need a refresher: Tariffs are taxes imposed on imported goods, with the goal of protecting domestic industries by making foreign products more expensive.

“High tariffs are taxes imposed on imported goods, intended to protect domestic industries from foreign competition. While they aim to boost local manufacturing by making imported goods more expensive, they can also lead to higher costs for consumers and businesses relying on foreign materials.

It is crucial for both recruiters and businesses to grasp how these tariffs could alter industry dynamics and hiring needs, to better prepare for what is already a rapidly changing landscape shaped by advances in technology and employee/employer expectations.

Snapshot of what we’re seeing:

Impacts on our industries:

The lumber industry could be among the most impacted by tariffs, especially with Canada.

According to HBS Dealer, “Continued strong enforcement of the U.S. trade laws against unfairly traded Canadian lumber imports is exactly what must happen to keep expanding U.S. lumber manufacturing and availability to build more American homes,” said  Andrew Miller, coalition chairman and owner of Stimson Lumber Company.

In the manufacturing + construction space, potential increased costs for raw materials like steel and aluminum is something we are keeping an eye on as well as delays in supply chains.

“In the short term, high tariffs can lead to an increase in domestic manufacturing jobs as local companies ramp up production to meet demand. However, this is often accompanied by higher production costs due to more expensive imported raw materials.

However, in the long term, domestic manufacturers may need logistics experts, engineers, and operational leaders to manage and scale production effectively creating more employment opportunities.

Tariffs can mean an increased demand for skilled labor

As companies adapt to higher production costs, there may be an increased demand for workers skilled in cost-saving measures, process optimization, and automation.

We talk a lot about upskilling and the value of soft skills – 2025 will be the year to make sure you know your value. Check out our guide on skills-based recruiting and what you need to know here for a quick overview.

As we said things are changing daily and a lot can change in 100 days:

Potential impact summary within the first 100 days of Trump’s presidency:  

“The U.S. imports the most goods in the world from Mexico, Canada and China as its top-three importers, U.S. Census data showed. Because of how quickly the Trump administration wants to enact tariffs and how tariffs might drive up costs, economists from the largest construction associations said contractors will likely face uncertainty when managing materials prices”

“Construction is more reliant than most industries on imported materials, parts and components,” says Ken Simonson, the top economist for the Associated General Contractors. “Because the industry is so diverse and obtains materials mainly through intermediaries rather than importing directly, it’s impossible to estimate the share of construction purchases that go for imports. Also, it varies by location as to whether contractors are using domestically sourced or imported materials such as lumber, steel or cement,” he added.

What we’ve previously experienced

Published in 2020 the American Economic Review notes:

Trade Policy as a Tool for Economic Security

• The 2018 tariffs illustrate how trade policies can be used to safeguard critical domestic industries, ensuring that essential production remains within national borders. This provides economic resilience and security during global disruptions.

Consumer Adaptation and Market Resilience

• Despite initial price increases due to tariffs, the U.S. market demonstrated resilience by adapting supply chains and maintaining competitive pricing through strategic adjustments by domestic and foreign producers

As industries adapt to tariff-driven changes, employees will have opportunities to enhance their skill sets to meet new demands. This can create a more resilient and adaptable workforce.

What does all of this mean for the recruiting space?

We need to take it day-by-day and in some ways, it’s business as usual… focus on building and maintaining a diverse and highly-skilled network of job seekers that can adjust to a changing landscape and bring creativity and innovation to whatever role they fill.

We foresee a shift in demand for certain skills and roles and it’s our job to stay on top of industry trends so we can anticipate these changes and support our clients in finding the right fit for their roles.

We’ll continue to encourage job seekers to look for opportunities to upskill and build their professional repertoire, so they are ready when the next great job comes their way.

Potential tariffs could certainly create challenges for employees across all industries. While certain industries may thrive in an environment where the focus is on domestic production, others that rely heavily on imported products may have to get creative.

While there is uncertainty, TZR’s objectives remain consistent – stay current on the employment landscape, help clients understand their needs and how to best fulfill them, and keep job seekers nimble and prepared to use their skills and expertise to thrive.