Sectors heavily reliant on international trade, especially those using imported inputs, will be most impacted by tariffs. This includes manufacturing, including electronics, transportation, and machinery, as well as energy, food processing, and agricultural industries. Industries like mining, which relies on imported raw materials, also face significant risks.
In 2024, China was the third-largest importer of US exports measured by value, accounting for 7% of US exports. Chemicals , computer and electronic products, agricultural products, transportation equipment and oil and gas made up 18%, 14%, 13%, 13% and 9% of the value of US exports to China, according to data from BIMCO, the world’s largest direct-membership organization for shipowners, charterers, shipbrokers and agents.
Manufacturing industries are deeply linked to international trade, rendering them susceptible to disruptions from tariffs. This encompasses sectors like electronics, transportation equipment, machinery, and computer components.
Tariffs on imported agricultural products and raw materials threaten the agriculture and food processing sectors. The US agricultural industry is expected to face a considerable effect, with exports to China reaching $18.2 billion, representing 23% of total US exports, according to BIMCO.
The mining sector, particularly those reliant on imported primary metals and minerals, is exposed to increased costs and potential supply chain disruptions. The energy sector, which includes oil refiners and potentially energy imports from Canada, could also see increased costs.
Retailers that rely on imported goods and materials, such as clothing, electronics, and toys, could face price increases and supply chain challenges. While retailers have some short-term cost-cutting tricks, they acknowledge these are just temporary solutions, which is why many have started developing long-standing approaches to avoid further damage caused by trade war tariffs. Some lean toward geographic diversification or a full-on exit from China. Alternative geographies include nearby countries like Malaysia, Indonesia and Vietnam, as well as new continents like Africa or South America.
The construction industry, reliant on imported materials like steel and lumber, faces rising costs and possible supply chain disruptions. The most immediate risk to the construction industry will be to material prices. The U.S. construction industry will face higher input costs if producers cannot find alternative products or inputs, pivot their supply chain, or receive an exemption on specific goods. Goods from Canada, Mexico, and China make up about 41% of US imports. The most vulnerable construction sectors will be within the residential and commercial real estate sectors. Homebuilders are already facing a severe housing shortage and high construction and labor costs, so further price increases and labor reductions could constrain the construction of homes and apartments.
The automotive sector, particularly car manufacturers and parts suppliers, relies heavily on imported materials such as steel, aluminum, and semiconductors, making it vulnerable to tariffs. American auto producers have started to lobby for effective exemptions from Trump’s tariffs. Shortly after implementing the 25 percent duties on Canada and Mexico last month, the White House announced a suspension of tariffs on goods that comply with the North American trade agreement negotiated by Trump during his initial term. This provided considerable relief for the auto industry, as the automotive supply chain in North America is closely interconnected, with Mexico and Canada being the top exporters of auto parts to the U.S.
Industries facing significant cost increases from President Donald Trump’s steep new tariffs on China are all ramping up their lobbying of the administration to press for carve-outs and assistance. Trump’s aggressive tariff policies have caused uncertainty for both investors and business leaders, many of whom rely heavily on imported goods. However, with no formal process in place to submit their requests and no direct line to the one decision-maker who matters, most businesses and industries could be in for a long wait.
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David Rosenstrock, CFP®, MBA, is the Director and Founder of Wharton Wealth Planning ( https://whartonwealthplanning.com/ ). He earned his MBA from the Wharton Business School and B.S. in economics from Cornell University. He is also a CERTIFIED FINANCIAL PLANNER™.