2025 Manufacturing Outlook: Key Policies and Industry Trends

Uncertainty is the operative word for policies affecting U.S. manufacturers in 2025. From tariffs to per- and polyfluoroalkyl substances (PFAS) regulations and environmental-related rules, government affairs professionals face a challenging year ahead as they try to predict the trajectory of federal and state policy.

“There’s so much uncertainty,” says Martin O’Neill, principal owner of Insight Advisors LLC and a former executive at a Fortune 500 global chemical manufacturer. “I think a lot of people have put things on pause while they see the landscape unfold.” 

With the unpredictable policy environment, O’Neill says many are increasingly concerned about the U.S. economy’s future and what support will be like for domestic manufacturers. This article explores key manufacturing policies and trends to stay on top of in 2025.

Manufacturing Policies to Watch

New Tariffs Reshape Trade Dynamics

On April 2, 2025, President Donald Trump announced tariffs on some of the U.S.’s largest trading partners in a bid to promote domestic manufacturing. These include a baseline 10 percent tax on all imports and higher rates on goods from countries with trade surpluses with the U.S. The administration says these measures will generate significant revenue and bolster domestic production, though critics warn of increased consumer costs and potential inflation.

In addition to general tariffs, the administration has implemented a 25 percent tariff on all foreign-made cars and auto parts. This move aims to encourage the establishment of U.S. manufacturing plants. However, experts express concern about rising vehicle prices and potential supply chain disruptions.

PFAS Policies in Flux

Federal rules related to per and polyfluoroalkyl substances (PFAS) — a group of synthetic chemicals — are uncertain. In January 2025, the Trump administration halted plans to set wastewater discharge limits on PFAS, representing a substantial hurdle when it comes to addressing water pollution. 

“PFAS contamination is already a public health crisis,” says Melanie Benesh, vice president of government affairs at Environmental Working Group, an advocacy group focused on toxic chemicals, drinking water pollutants, and corporate accountability. “State regulators have waited for the federal government to lead on this issue so they can incorporate effective monitoring and treatment requirements into their discharge permits. Without federal limits, those efforts remain stalled.”

Despite federal uncertainty, 30 states have already adopted 154 state PFAS policies, while 34 states have introduced 201 policies to protect people from toxic chemicals. Eleven states — including New York, Michigan, and Pennsylvania — have set maximum contaminant level standards for certain PFAS in drinking water.

Environmental Rules in Peril

In March 2025, the U.S. Environmental Protection Agency (EPA) announced it would reassess 31 of its rules and policies that have significant implications for domestic manufacturers. This sweeping review is part of the administration’s broader deregulatory push and includes possible changes to air and water quality standards, as well as chemical reporting requirements. 

The EPA is now also allowing industrial manufacturers to apply for a presidential exemption from requirements related to emissions reductions and the use of toxic chemicals. “Responsible corporations will do the right thing consistent with business drivers,” O’Neill says. “But without a consistent and predictable regulatory scheme, there is an opportunity for variation and an uneven playing field, which will impact the rate and pace of important investment decisions.”

Climate Disclosure Rule at Risk

Another regulatory rollback affecting U.S. manufacturers involves the suspension of the SEC’s climate reporting rule, which would require all publicly listed domestic manufacturers to disclose their climate-related financial risks, including their Scope 1 and 2 emissions. In late March, the SEC announced it would cease defending the rule, which SEC acting chairman Mark Uyeda has described as “deeply flawed.”

After the announcement, some manufacturers voiced their support against the rule.

“Manufacturers welcome today's decision by the SEC to end its defense of the costly climate disclosure rule,” said Charles Crain, managing vice president of policy at the National Association of Manufacturers (NAM), in a post on X. “At a time when manufacturers are already facing regulatory costs exceeding $350 billion every year, balanced regulatory policy is vital.” 

Top Manufacturing Trends and Opportunities

Generative AI in Manufacturing

A growing number of manufacturers are focused on using generative AI in their operations to help drive return on investment. According to a 2024 Deloitte report, 55 percent of industrial manufacturers said they were already using generative AI, while 40 percent said they planned to increase their AI investments in the next three years. 

“By focusing on collaboration, education, and responsible adoption, manufacturers can harness AI to achieve remarkable results while fostering innovation,” Mei Dent, Chief Product and Technology Officer at software company TeamViewer, told ETCIO.

Extended Producer Responsibility

​Extended Producer Responsibility (EPR) is gaining momentum in U.S. manufacturing policy, with several states enacting laws that require producers to manage the entire lifecycle of their products. 

For instance, states like Maine and Oregon are enacting laws that require producers to fund and manage the recycling and disposal of their packaging materials. While the EPA previously voiced its support for a national EPR framework, this remains stalled amid competing legislative priorities and a divided Congress.

Supply Chain Stability

While supply chain issues have improved since 2020, they still remain a challenge due to shipping delays, labor challenges, rising input costs, and policy changes. A recent NAM survey found 35 percent of manufacturers cited transportation and logistics costs as a core business challenge in the third quarter of 2024. 

“The strength of local supply is really important,” O’Neill says. “I do think this administration’s approach to onshoring is smart, and it’s a continuation of what the Biden administration wanted to do. They just seem to be going at it in different ways.”

Stay in the Know on Manufacturing Policy and Trends

With shifting trade dynamics, state-led actions, and evolving federal priorities, manufacturing policy is anything but static. From compliance risks to strategic opportunities, policy changes can reshape operations overnight, making it critical for government affairs professionals to track developments.

To stay ahead, leading manufacturers rely on PolicyNote, which delivers real-time insights into legislation and regulation that impact the manufacturing industry. PolicyNote helps you anticipate changes, align your strategy, and advise stakeholders with confidence. Request a demo to learn more.