The conversation around tariffs is heating up again, and for many industrial OEMs, the uncertainty is causing hesitation—particularly when it comes to launching or piloting new IoT and connected product strategies. New U.S. trade actions in early 2025 have introduced steep tariffs on categories such as semiconductors, batteries, magnets, and electronic components from China—some of which now exceed 100%—making it understandable that manufacturers are questioning the timing of their next move.
But here’s the hard truth: if you’re delaying your IoT pilot because of tariff headlines, you’re missing the bigger picture.
The Tariff Spike Is Real. But It Shouldn’t Be Paralyzing.
Recent U.S. policy updates have significantly increased tariffs on key inputs for connected hardware and industrial electronics. These changes, combined with ongoing uncertainty about global trade policy, are forcing many OEMs to revisit their timelines and sourcing strategies.
But none of that changes this fundamental fact: pilot programs are not high-volume production efforts. Whether you’re building 20 circuit boards or testing a sensor module in a single facility, the stakes are relatively low—and the upside is significant.
What you gain during this pilot period is clarity: clarity on feasibility, clarity on cost structure, and clarity on future scalability. Tariffs may increase, decrease, or get renegotiated—but if you delay the discovery process, you’re standing still while your competitors move forward.
Starting Small Can Still Get You Ahead
There’s a natural instinct to wait until conditions are “just right.” But in IoT, that moment rarely comes. Hardware takes time. Iterations take time. If you wait six months to start your pilot, you’re not saving money—you’re pushing your timeline back a year.
Piloting today gives you the advantage of proving your concept under current market conditions. If tariffs ease later, you’re ahead of the curve. If they persist, you’ve already absorbed the risk in small quantities and built the knowledge base to scale efficiently.
Consider the ROI: Nearshoring Isn’t Always the Answer… Yet
We hear it a lot: should we move our production to Mexico? The reality is more nuanced. While nearshoring can provide long-term savings, it doesn’t always make financial sense for early-stage prototyping.
For example, relocating tools and retraining teams to shift production from China to Mexico could cost hundreds of thousands of dollars. Meanwhile, the tariff impact on your pilot order might be a few thousand at most. Until you validate the product and understand your path to scale, that relocation investment might not be justified.
Mesh’s Position: Don’t Wait. Start Smart.
At Mesh Systems, we understand that tariffs introduce friction—but they don’t have to halt progress. In fact, we’ve built our supply chain strategy to support flexibility and regionalization from the outset. Whether it’s assembling components in Indiana or working with U.S.-based manufacturers in Indiana and Michgan, we offer options that mitigate exposure to unpredictable global trade dynamics.
We’ve seen it firsthand with clients navigating decisions around connected product pilots: the cost of waiting often exceeds the cost of testing. And with tariff rates fluctuating anywhere from 2% to 145% depending on source and product class, having the ability to design, pilot, and pivot quickly is more valuable than ever.
The Takeaway: Tariffs Are a Variable. Your Product Roadmap Shouldn’t Be.
Every OEM faces a different set of pressures, but one thing is consistent: progress beats paralysis. The companies that win are the ones that keep building, even when the landscape is uncertain.
Don’t let headlines stop your product journey. Start your IoT pilot, validate your solution, and adapt as you go. The path ahead isn’t perfect—but waiting won’t make it any clearer.
If you’re ready to move forward with a strategic partner that understands how to navigate volatility while keeping your roadmap intact, we’re here to help. Contact the Mesh Systems team to start a conversation about your IoT pilot or connected product strategy today.