The passage of the One Big Beautiful Bill Act (OBBBA) has ushered in a new era for American manufacturing — one that is not defined by reactive tariff fatigue, but by proactive and policy-driven optimism.
As manufacturers recalibrate their strategies in response to the OBBBA’s sweeping tax incentives, the sector is experiencing a renaissance of investment, innovation and strategic expansion. Across sectors, the OBBBA can be a catalyst for modernization to Industry 4.0.
From fatigue to the future
For the last few years, manufacturers have navigated a landscape riddled with uncertainty and restrictive policy. Tariffs, trade tensions and unpredictable regulatory shifts have forced many into defensive postures that absorbed costs and delayed strategic decisions. “When I would bring up tariffs with manufacturers, there were mixed reactions. But with the OBBBA, my conversations are much more exciting,” said Grant Thornton Manufacturing Industry Leader Kelly Schindler.
The OBBBA changes the narrative. With provisions like full expensing for equipment and capital investments, enhanced R&D deductions and favorable interest treatment, manufacturers now have a clear incentive to invest domestically. These incentives are not only more effective than tariffs in encouraging onshoring — they’re also more sustainable. “It incentivizes a manufacturer to bring supply chain into the U.S. more than tariffs,” Schindler explained.
Cash savings for innovation, expansion and M&A
The immediate impact of the OBBBA is financial. Accelerated depreciation and expanded deductions are generating significant cash tax savings, and manufacturers are already exploring how to deploy this newfound liquidity. “We are expecting some expansion, some upskilling of workforce, and again R&D activity coming into play,” Schindler said. “M&A activity is definitely there, or it’s being explored.”
This surge in M&A is not just about scale — it’s about strategic capability. Many manufacturers are acquiring companies to capitalize on their technologies or resilient supply chains. This helps them leapfrog implementation hurdles and align with their long-term vision. “Some of them are doing acquisitions to acquire that technology, or acquire that innovation,” Schindler explained. “It’s more aligned with their North Star, or ‘future them.’”
Sector voices from the field
Food & Beverage
In the food and beverage sector, tight margins and complex supply chains have made tariff impacts especially acute. Many companies are absorbing costs, unable to pass them on to consumers. The OBBBA offers a lifeline. With automation and AI capabilities, the food and beverage sector can streamline operations and reduce their dependence on volatile global supply chains. “All entities have been focused on reducing costs, finding efficiencies, and I would say those efforts have doubled down as a result of tariffs,” Schindler noted.
Automotive
Automotive manufacturers can use cash tax savings to help transition to smart factories. With thousands of SKUs and intricate bills of materials, AI tools are being deployed to monitor component costs and flag tariff-related risks. “AI can be used to monitor those SKUs and all those components … it can flag you to look to an alternative vendor or supplier, or maybe not sell a product while the tariff is at a certain rate,” Schindler advised.
Industrials
Industrial manufacturers can invest in much-needed plant modernizations and workforce development. Companies are using cash savings to upskill employees, shifting them from manual roles to supervisory positions in automated environments. “Companies are using [automation] as a workforce supplement … putting legacy employees in more of a review role, or monitoring role instead of the physical doer,” Schindler explained.
Chemicals
In the chemicals sector, where regulatory compliance and precision are paramount, the OBBBA is driving investment in digital twins, predictive analytics and robotics for roles like tank cleaning. Robots can do this work in a fraction of the time, at higher quality and with greater safety for employees. These technologies not only improve efficiency but also enhance safety and compliance. M&A activity is also robust, with firms acquiring niche players that offer specialized capabilities or domestic supply chain advantages.
AI and automation for resilience
Today’s technology investments can finally drive AI and automation adoption overall. For years, manufacturers have recognized the need to modernize but prioritized other needs. The OBBBA can change that. “There’s been some hesitancy before, but I do believe the cash tax savings from the OBBBA have basically given that permission,” said Schindler. “We have that cash on hand. Let’s get into it.”
AI is being used to fill gaps left by cost-cutting measures, such as the elimination of financial planning and analysis (FP&A) roles.
It’s also enabling scenario planning at unprecedented speed and scale. “Historically, for humans to do, it can take hours or weeks or months … now an AI model can be developed to do that in hours or less,” Schindler noted.
Automation is not just about efficiency — it’s about resilience. As Schindler put it, “Certainty is not happening. Uncertainty is. Companies that scenario plan through it and they keep their eye on that North Star … and continue forth with what is going to be ‘future them’ will be successful.”
The future of human innovation
Contrary to fears of job displacement, automation is being used to supplement — not replace — the workforce. Existing employees can be upskilled to transition into roles that provide the oversight and optimization that automated systems need. This not only enhances productivity but also boosts morale and retention. “It’s upskilling them, which is fun and exciting for them and makes them feel more valuable in the company. So, it truly is honestly a win-win,” said Schindler.
The OBBBA can be a strategic inflection point that spurs manufacturers to move from reactive cost-cutting to proactive investment in Industry 4.0. It can encourage diversification, innovation and long-term planning. And it can provide the financial foundation for companies to pursue their “North Star” with confidence.
As Schindler concluded, “the OBBBA has definitely opened that door and said go start your journey. It's very, very exciting and cool to see where all it's going.”
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This Grant Thornton Advisors LLC content provides information and comments on current issues and developments. It is not a comprehensive analysis of the subject matter covered. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this content.
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