How Tariffs Affect Different Industries

One concern I've frequently noted with placing tariffs on many goods is that the US relies on many imports to facilitate our own export activities. Thanks to the Bureau of Economic Analysis' expanded data on trade in value added for US exports (https://lnkd.in/eY9J9uQq), below I've compiled the industries where imports represent the largest dollar value share of value added in US exports by industry. I've also included the share of domestic value added in those US exports. Data are for 2023. Thoughts: •Petroleum & coal products, which captures petroleum refining, as a relatively lower share of domestic value added compared with the other sectors because of US reliance on Canadian crude oil. •Crop production relies on imported fertilizers and farm machinery (amongst other inputs). •Up next, we see sectors like other machinery, light truck/SUV manufacturing, and aerospace products. This is why tariffs on imported auto parts make limited sense. For example, why tariff auto parts from Japan assembled into vehicles that are then exported to Canada? •We see various chemical products, food, motor vehicle parts, and paper also rely on significant shares of imported inputs for goods ultimately exported. Implication: The BEA's enhanced trade in value added tables provide greater visibility as to the industries that are most reliant on imports to create exports. While the majority of value added from US exports stems from domestic content (which we would expect), suddenly raising the costs of imported inputs by 30% when those imported inputs represent a significant share of value added (say 20%), and you have a recipe for US exports being made less competitive. #supplychain #economics #shipsandshipping #freight #manufacturing

On March 12, the U.S. will expand 25% tariffs on a much wider range of steel and aluminum products, removing all country exemptions and eliminating individual exclusions for importers.   These sweeping changes will significantly impact costs and supply chains:   ▪️ Steel imports affected will rise from 7M to 26M metric tons, with derivative products (elevator parts, prefabricated buildings, etc.) pushing the total tariff impact to $72B. ▪️ Aluminum imports affected will jump from 2.3M to 3.5M metric tons, with derivatives (aircraft parts, appliances, baseball bats, etc.) bringing the total to $132B. ▪️ The cost burden on importers will total $22.4B for steel and aluminum, plus up to $29B more for derivative products—over $51B in total. ▪️ Industries most affected: The automotive, construction, and machinery sectors—which rely heavily on imported metals—face significant cost increases and supply chain pressures. ▪️ Key trading partners impacted: Canada, the EU, Japan, Mexico, South Korea, Brazil, and Argentina—who account for approximately 75% of U.S. steel imports—will now be fully exposed to these tariffs.   Unlike in 2018, there will be no carve-outs or exclusions. The previous system allowing U.S. companies to apply for tariff exemptions has been shut down. Potential retaliation is looming. The EU and Canada have already signaled possible countermeasures, though details remain unclear. US Tariffs are unfolding in multiple chapters, each impacting a different group of trade partners and sourcing nations. Potentially no major trade partner will be wholly exempt. It is important for businesses to plan ahead and develop scenarios to understand key risks they might face.   Would love to hear from leaders in manufacturing, metals, and trade—how are you preparing for these shifts? https://lnkd.in/gC9jhC-A.  

𝐉𝐮𝐬𝐭 𝐏𝐮𝐛𝐥𝐢𝐬𝐡𝐞𝐝: 𝐇𝐨𝐰 𝐓𝐫𝐮𝐦𝐩'𝐬 𝐓𝐚𝐫𝐢𝐟𝐟𝐬 𝐀𝐫𝐞 𝐑𝐞𝐬𝐡𝐚𝐩𝐢𝐧𝐠 𝐭𝐡𝐞 𝐈𝐓 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐋𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞 I've just published an in-depth analysis on how Trump's tariffs are transforming the IT services industry in unexpected ways, and wanted to share the key insights with you all. Ever notice how during a storm, some trees bend while others break? My analysis reveals this exact pattern playing out across different sectors. The data shows it's not a direct hit to IT companies themselves, but rather a ripple effect through their clients. Travel companies are postponing upgrades as tourism forecasts dim. Retail and manufacturing clients are watching their margins shrink faster than ice cream on a summer sidewalk as import costs rise. Meanwhile, healthcare and utilities continue investing steadily. What's fascinating is the clear bifurcation in spending: - On the decline: Discretionary projects (those ambitious digital transformations) are being shelved faster than New Year's resolutions in February. - On the rise: Cost-efficiency initiatives have become the MVP – every client suddenly wants solutions that deliver immediate savings. My full analysis explores valuation impacts, competitive positioning, and why certain providers will not just survive but thrive in this environment (spoiler: it's all about automation and efficiency frameworks). For investors and industry professionals alike, this means being selective rather than running for the hills. The companies that help clients do more with less will emerge stronger, while those dependent on big-ticket discretionary spending may struggle to weather the storm. What's your experience? Are you seeing clients shift from innovation to efficiency in your corner of the tech world? #ITServices #TariffImpact #TechIndustry #InvestmentInsights

In mid-2025, way more businesses are talking about their impact than you might expect! Here's my top ten findings. 🌍 From hotel makeovers to computer chip factories, tariffs are quietly changing how companies make decisions. Using the new real-time tariff track from Marvin Labs I pulled out ten key impacts and commentary from company earnings announcements. (since July 1st) Here's what I found 1) Tariffs are a niche but material topic 🔔 Across the companies tracked, 18% explicitly mentioned tariffs in their earnings disclosures or calls. While most cited “no material impact,” those affected often saw multi-million dollar cost implications or strategic shifts. 2) Motorola Solutions: $80M in 2025 headwinds 👀 Motorola Solutions cut its full-year tariff impact estimate from $100M to $80M thanks to mitigation measures. Most of this hit is expected in H2-2025, with minimal Q2 impact on margins. 3) EOG resources benefited, for now 🎁 EOG’s Q2 oil demand got a lift from delayed tariff implementation. Management warned that inflationary pressures could return if tariffs or trade barriers are imposed later in the year. 4) Microchip Technology: small but measurable impact 💡 Tariff-related order pull-ins from Asia totalled only $7–9M in the quarter (-74 bps margin effect). Most of its China-related production occurs in free trade zones, insulating it from direct tariff costs. 5) Wynn Resorts: Tariffs delay Vegas remodel 🏩 Uncertainty from tariffs prompted Wynn to revise its sourcing for the Encore Tower remodel, pushing the project start to Spring 2026. While the disruption is minor, it underscores how tariffs affect capital planning. 6) Parker Hannifin: Zero EPS Impact, for now 🥇 By flexing pricing, leveraging its “local for local” model, and dual-sourcing, Parker-Hannifin has neutralised tariff effects on EPS. However, management flagged tariffs (and rates) as causes of customer project delays. 7) Eli Lilly and Company: Watch the cost side 🤔 The pharma major listed tariffs as a potential driver of higher costs and restricted market access. 8) Kroger: Limited direct exposure, competitive edge 🍉 Less than 20% of fresh products and an even smaller fraction of centre store goods are imported. This gives Kroger an advantage if tariffs rise, as rivals with higher import dependence may face greater pricing pressure. 9) Impact Distribution is Uneven 🟢 Companies in industrial hardware and technology hardware tended to quantify dollar impacts, while services, healthcare, and retail mostly flagged qualitative risks. 10) Sentiment Score: Slightly negative 🤔 Across all mentions, tone skewed cautious. While some firms saw benefits from delayed tariffs, most framed tariffs as cost headwinds, uncertainty factors, or risks to timelines. Marvin Labs covers most global brands and includes tools like a real-time Tariff Tracker and Forward Guidance Extractor. 👇👇 You can try it here: https://lnkd.in/dCg86shF

🌍 The Economic Impact of Trump 2.0: Sectoral and Regional Perspectives🌍   The EY Economic Analysis Team (EY EAT) is pleased to share a comprehensive note on the potential economic impact of Trump 2.0, analyzing the country-specific and sectoral effects of potential tariffs under two scenarios: limited and broad-based tariffs.   🔍 Key Findings:   ▶️ Tariffs negatively impact economic activity, particularly in the short and medium term. The effects are highly heterogeneous across European countries but partially fade in the long term as capital and labor are reallocated across sectors and countries.   ▶️ Under the limited tariffs scenario, the blow to GDP in Europe and other affected economies would be relatively modest, reaching approximately 0.2% by 2027. Slovakia, Sweden, and Hungary would be the most affected countries at 0.3-0.4%, while most Southern European and Nordic states would see very little impact.   ▶️ In the long-term, sectors subject to tariffs in Europe, such as steel and motor vehicles, would see a drop in value added by 2-4%. Production would be reallocated from countries subject to tariffs to others. For example, electronics production would partially move from China to Canada, Mexico, and the US, while car production would partially move from Europe to Canada.   ▶️ In the broad-based tariffs scenario, the blow to economic activity would be significantly stronger. By 2027, GDP in the EU and the US would drop by 2.0-2.2%, with a much stronger hit experienced by Canada and Mexico due to disproportionately larger tariffs. Within Europe, Ireland and Hungary would be most strongly affected at 3.0-3.3%, while most Southern and Balkan countries would see a much more limited impact of approximately 0.5-1%.   ▶️ In the long term, the impact on EU GDP would largely fade. Higher tariffs between the US and China, Mexico, and Canada would induce some reallocation of production across and within jurisdictions. In the EU, electronics and motor vehicle production would increase by 2-5% due to increased competitiveness in external markets relative to Chinese, Mexican, and Canadian producers.   🔍 To study the effects of tariffs, we use two modelling approaches: 1️⃣ Global Macroeconometric Model: An EY-modified version of the Oxford Global Economic Model, suitable for studying short-term consequences of tariffs on macroeconomic aggregates such as GDP and inflation. 2️⃣ Computable General Equilibrium Model (EY-UPGRADE): Better suited for studying long-term consequences of tariffs on specific sectors of the economy.   📖 Read the full analysis here: https://lnkd.in/deygYCMv   #Economics #Trade #Tariffs #GDP #Europe #EconomicImpact #GlobalTrade #Policy #BusinessStrategy #EYInsights #CGE #Trump

The Impact of American Tariffs on Canada and Mexico: A Deep Dive into the Automotive Industry The recent imposition of tariffs by the United States on imports from Canada and Mexico has sent ripples through various sectors, with the automotive industry being one of the hardest hit. These tariffs, which include a 25% tax on goods from Canada and Mexico, have far-reaching implications for the industry, affecting everything from production costs to consumer prices. The automotive industry is highly interconnected, with parts and components often crossing borders multiple times before a vehicle is fully assembled. The new tariffs mean that each crossing incurs additional costs, which can quickly add up. For instance, the tariffs could increase the cost of manufacturing a vehicle by anywhere from $4,000 to $12,000, depending on the type of vehicle and the extent of its reliance on imported parts This increase in production costs is likely to be passed on to consumers, leading to higher prices for new vehicles. Analysts predict that the price of new cars could rise by as much as 10% This price hike could make new vehicles less affordable for many consumers, potentially driving them towards the used car market, which may see increased demand as a result. Broader Economic Implications The tariffs are not just a concern for automakers; they also have broader economic implications. Higher vehicle prices could lead to reduced sales, which in turn could result in job losses within the industry. The tariffs could also disrupt supply chains, leading to production delays and further increasing costs. Moreover, the retaliatory tariffs imposed by Canada and Mexico on American goods could exacerbate the situation. Strategies for Cost Reduction Short-Term Measures: 1. Diversifying Supply Chains: Automakers can look for alternative suppliers in countries not affected by the tariffs. This could help reduce the immediate impact of the tariffs on production costs.  2. Increasing Efficiency: Implementing lean manufacturing techniques and optimizing production processes can help reduce waste and improve efficiency, thereby lowering costs Long-Term Measures: 1. Investing in Automation: Automation can help reduce labor costs and improve production efficiency. By investing in advanced manufacturing technologies, automakers can reduce their reliance on imported parts and lower overall production costs  2. Developing Local Supply Chains: Building a more localized supply chain can help reduce the impact of tariffs and other trade barriers. 3. Innovating Product Design: By designing vehicles that are less reliant on imported parts, automakers can reduce their exposure to tariffs. This could involve using more locally sourced materials or developing new manufacturing techniques The road ahead may be challenging, but with innovation and strategic planning, the industry can navigate these turbulent times and emerge stronger. Your comments are indeed welcome!

𝗡𝗲𝘄 𝗧𝗿𝘂𝗺𝗽 𝗧𝗮𝗿𝗶𝗳𝗳𝘀 𝗦𝗲𝘁 𝘁𝗼 𝗦𝗵𝗮𝗸𝗲 𝗨𝗽 𝘁𝗵𝗲 𝗔𝘃𝗶𝗮𝘁𝗶𝗼𝗻 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆 The aviation industry is bracing for turbulence as former President Donald Trump’s newly announced tariffs spark concerns across global supply chains and airline operations. In a bid to bolster domestic manufacturing, Trump has introduced a sweeping package of tariffs targeting key imports, including aluminum, steel, and aircraft parts components critical to the aerospace sector. 𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝗔𝗶𝗿𝗰𝗿𝗮𝗳𝘁 𝗠𝗮𝗻𝘂𝗳𝗮𝗰𝘁𝘂𝗿𝗶𝗻𝗴 The most immediate impact will likely be felt by aircraft manufacturers such as Boeing and Airbus. With tariffs imposed on imported parts and raw materials, production costs are expected to rise. Aircraft assembly, which depends on a complex international network of suppliers, may face delays and cost inflation. For U.S.-based manufacturers like Boeing, increased prices on essential components such as titanium and composite materials could reduce profit margins or be passed along to buyers. 𝗔𝗶𝗿𝗹𝗶𝗻𝗲𝘀 𝗖𝗼𝘂𝗹𝗱 𝗙𝗮𝗰𝗲 𝗛𝗶𝗴𝗵𝗲𝗿 𝗖𝗼𝘀𝘁𝘀 Higher aircraft prices will eventually reach airline operators. Carriers planning fleet expansions or renewals could face steeper acquisition costs. This may also impact leasing companies, which typically purchase in bulk and pass on competitive rates to airlines. Increased costs could delay fleet upgrades and put pressure on airline profitability, especially for low-cost carriers with tight margins. 𝗣𝗮𝘀𝘀𝗲𝗻𝗴𝗲𝗿 𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 𝗮𝗻𝗱 𝗧𝗶𝗰𝗸𝗲𝘁 𝗣𝗿𝗶𝗰𝗲𝘀 Ultimately, passengers may feel the impact through higher ticket prices. Airlines facing increased operational and capital expenditures may pass some of the costs onto consumers. The extent of this shift will depend on market competition, fuel prices, and overall demand, but the tariffs are likely to add strain during a time when the industry is still recovering from the pandemic’s aftershocks. 𝗚𝗹𝗼𝗯𝗮𝗹 𝗧𝗿𝗮𝗱𝗲 𝗧𝗲𝗻𝘀𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗥𝗶𝘀𝗸 The tariffs may also strain relations with trade partners, particularly the European Union and China, both of which play significant roles in the aviation supply chain. Retaliatory tariffs or new regulations could exacerbate disruptions. There is also concern among industry leaders that the tariffs may deter foreign investment in the U.S. aerospace sector. 𝗟𝗼𝗼𝗸𝗶𝗻𝗴 𝗔𝗵𝗲𝗮𝗱 The full impact of the Trump tariffs on aviation will unfold in the months ahead. Industry stakeholders are calling for clarity on exemptions and potential support measures. Some have urged the federal government to provide temporary relief or incentives to mitigate the effects on American carriers and manufacturers. As the aviation industry navigates these policy headwinds, collaboration and strategic adaptation will be essential to maintaining operational resilience and global competitiveness. #AviationNews #TariffsImpact

Research with Gary Ng and Haoxin M. on US #tariff’s impact on #Asia’s #sectors. In this note, we look beyond exports and analyze the impact of US tariffs on Asia from the value-added perspective. The value-added approach can avoid double counting (components can cross borders multiple times in the production process) and focuses not only on final products but also intermediate goods. This approach can better reflect an economy’s sectoral exposure to certain end-market, which provides a closer glimpse of impact on domestic production and employment. Asia’s reliance on US demand has grown compared to 2017, when the trade war first started, even for China. Considering the direct exposure of goods exported to the US, Vietnam and Taiwan are the most exposed, but the latter is better positioned as semiconductors, a bulk of Taiwan’s exports to US, are exempted for now. With imminent risk of US and global economic stagnation, if not recession, there might also be second-order effect and spillover to other industries, broadening the demand shock to services-oriented economies like Singapore and Hong Kong. From a sectoral perspective, transport equipment is by far the most exposed in Asia with 25% of value-added exported to the US. Machinery, rubber and plastics, and electrical and optical equipment are also at risk with substantial market cap as well as sizeable exposures, albeit to a lesser extent. While the reciprocal tariff comes with exemptions for autos, semiconductors and pharmaceuticals (autos already facing 25%), there is no guarantee that no more tariffs will come after them in the future. In developed Asia, Japan, South Korea, and Taiwan are particularly exposed to the US demand for electronics and industrial goods, such as automobile and parts, and to a lesser extent metals and materials. For the rest of Asia, the risk focuses on the exports of commodities. Vietnam and India are special cases with even broader exposure due to the influx of US investment over the past years thanks to US-China decoupling and production friend-shoring, but India may be more shielded by its massive domestic demand and reliance on service exports. Therefore, Asia is vulnerable to US tariffs due to high direct exposure and the knock-on effects of weaker global growth. If the tariffs are fully implemented (no deals) or even further hiked, the region may face great shocks as substituting for US demand will be hard. Corporate earnings may also be reduced due to higher production costs even if firms manage to invest and produce in the US. All in all, the sectoral impact on Asia will be widespread, and we may expect significant underperformance of Asian companies in the foreseeable future. If you would like to read full summaries and more of my Op-Eds, please subscribe my newsletter channel on Substack for free: https://lnkd.in/gVmzAkEu