Trump’s Tariffs: 4 Industries That Might Be Most Impacted
Written by
Terence Loose
Edited by
Zuri Anderson
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President-elect Donald Trump really loves tariffs. So much so that he has said that he will impose 60% tariffs on Chinese imports, a 25% tariff on Mexican and Canadian goods and blanket tariffs of 10% to 20% on imports from most other countries. Trump believes that tariffs are good for America, once saying, “The most beautiful word in the entire dictionary of words is the word ‘tariff.'”
Many analysts and experts disagree. They say that the real losers are American industries and, ultimately, American consumers. Industries pay a tariff to import goods, and that cost is passed onto consumers in the retail cost of the goods, said Stuart Schiffman, certified financial planner (CFP), founder and managing partner of Compound Wealth Advisors.
“The potential economic slowdown and inflationary impacts of tariffs are significant, but it gets even worse when you consider the potential retaliatory tariffs imposed by other countries on U.S. goods. Raising tariffs as a way to impose our will on other countries may not be such a great idea after all,” he said.
Here are four industries that would be hard hit by the tariffs.
Housing and Construction
Owning a home is about as American Dreamy as you can get. But, experts said, if tariffs are imposed on Canada, that dream could get even costlier since the construction industry relies heavily on Canadian softwood, as well as aluminum and steel.
During Trump’s first term in office, he imposed tariffs on Canadian softwood imports that the National Association of Home Builders claimed raised the cost of a single-family home by approximately $9,000.
“The 2018 decision to impose a 25% tariff on steel and a 10% tariff on aluminum led to material cost increases, with some contractors reporting hikes of 10% to 15%,” said George Carrillo, co-founder and CEO at Hispanic Construction Council.
“Rising costs affect the entire industry, causing project delays, tighter profit margins for small businesses, and increased housing costs that worsen affordability issues.”
Tech
Americans are in love with their smartphones, giant flat-screen TVs and everything else that features a power switch or charging light. And if they seem expensive now, wait a few months, say experts.
That’s because of the number of electronics and electronic components imported from China, as well as the assembly of electronics in China, Mexico and elsewhere.
According to NBC News, the Consumer Technology Association is very concerned that tariffs on these tech-critical countries will slow their progress and inflate prices. Tariffs on these imports would drive up costs, which would ultimately be passed on to consumers, said Schiffman.
Automobiles and Auto Parts
The idea of import tariffs boosting the American car market sounds good on paper. Unfortunately, out in the real world, the story is a bit more complicated, said Schiffman. U.S. car manufacturers make many of their vehicles abroad, including in Mexico.
“Automobiles that are assembled in Mexico could become significantly more expensive,” he said. Consumers would pay that cost. In fact, according to an MSN report, analysts estimate that tariffs could hike the cost of a new car by $1,000 to $5,000.
Agriculture
During Trump’s first term in office, his tariffs and trade war with China hit farmers hard, especially those exporting to China. In the years since, farmers made up for the losses in the Chinese market by increasing exports to Canada and Mexico.
If Trump imposes tariffs on those markets, however, it might start a trade war that could hit American farmers again. Mexico’s President Claudia Sheinbaum has already indicated that she would retaliate in kind.
This would likely affect apples, potatoes, soybeans and wheat, according to Agriculture Dive. These could also increase prices for consumers.
In addition, a report by the World Agricultural Economic and Environmental Services found that a trade war with China would hammer corn and soybean farmers and hand vital market share to Argentina and Brazil.
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