Tariffs and trade wars: unpacking the impact on US industries

February 2, 2025 | New York, NY

The US has recently announced new tariffs on goods from Mexico, Canada, and China, raising questions about the impact on businesses and consumers. This article includes a breakdown of tariffs, the sectors that are mostly affected, and the companies that might benefit the most from this protectionist policy of President Trump's new administration.

What is a tariff and how does it work?

A tariff is a tax imposed on goods imported from another country. The US Customs and Border Protection agency collects tariffs at 328 ports of entry across the country. Tariffs can be a percentage of the import price (ad valorem) or a fixed fee per item (specific). Importers pay the tariff directly to the government when goods enter the country. The goal is often to protect domestic industries by making foreign goods more expensive, while generating revenue for the government.

While importers pay tariffs directly to US Customs and Border Protection, these costs are often passed on to consumers in the form of higher prices. Businesses that rely on imported materials also face increased costs, which can raise their cost of operations, and ultimately the price that they are able to offer their products to their customers.

Top Imports to the United States

Below is an overview of the top products and goods imported from Mexico, Canada, and China into the United States.

Top imports to the US from Mexico:

Automotive: vehicles and auto parts
Electronics
Crude oil
Medical devices
Food: vegetables, fruits, and nuts
Beer
Plastic items
Gems and precious metals

Top imports to the US from Canada:

Machinery and transport equipment
Mineral fuels
Manufactured goods,
Food (e.g. cherry tomatoes and maple syrup)
Chemicals

Top imports to the US from China:

Smartphones
Digital automation systems
Toys
Video game consoles
Lithium batteries
Display monitors
Pre-dosed medications
Computer accessories
Plastic goods

Future of trade partner relations

Mexico and Canada have indicated they will retaliate with tariffs on US goods. China has not yet announced specific actions but is likely to respond in some way.

The imposition of tariffs can have significant consequences for all countries involved. Increased costs for businesses and consumers, potential trade wars, and strained diplomatic relations are just some of the possible outcomes. This means that the future of trade relations between the US, Mexico, Canada, and China remains uncertain.

Manufacturing in the United States

While many products are still largely imported, several US-based companies are working to bring manufacturing back to the United States. Here are some major players in each category that could be benefitted by the recently announced policy:

Vehicles:

Tesla: a leading electric vehicle manufacturer with factories in California, Nevada, and Texas.
General Motors: produces vehicles across several US states, including Michigan, Ohio, and Indiana.
Ford: another major automaker with production facilities in Michigan, Kentucky, and Illinois.

Auto Parts:

Lear Corporation: a global automotive technology leader with manufacturing facilities in multiple US states.
BorgWarner: provides innovative mobility solutions with a strong manufacturing presence in the US.
Dana Incorporated: a global leader in drivetrain and e-propulsion systems with US-based production.

Electronics:

Intel: a major semiconductor manufacturer with fabrication plants in Arizona, Oregon, and New Mexico.
Texas Instruments: designs and manufactures semiconductors with factories in Texas and Maine.
Apple: while heavily reliant on overseas production, Apple has started manufacturing some Mac computers in Texas.
Advanced Micro Devices: semiconductor company offering microprocessors and GPUs for data centers, gaming, and embedded segments; sourcing from Taiwan and Arizona.

Crude Oil:

ExxonMobil: a leading oil and gas producer with operations in Texas, New Mexico, and Alaska.
Chevron: another major oil and gas company with significant production in the US.
ConocoPhillips: focuses on oil and gas exploration and production with operations in several US states.

Medical Devices:

Medtronic: a global leader in medical technology with manufacturing facilities in Minnesota, Colorado, and California.
Abbott Laboratories: develops and manufactures a wide range of medical devices with US-based production.
Johnson & Johnson: a multinational healthcare company with significant medical device manufacturing in the US.

Beer:

Anheuser-Busch: the largest brewing company in the US with breweries across the country.
Molson Coors Beverage Company: operates breweries in several US states.
Boston Beer Company: the brewer of Samuel Adams with breweries in Massachusetts and Pennsylvania.

Plastic Items:

Berry Global: a leading provider of plastic packaging solutions with manufacturing facilities throughout the US.
Sealed Air: specializes in protective packaging solutions with US-based production.
Novolex: manufactures diverse packaging products with a strong manufacturing presence in the US.

Gems and Precious Metals:

Richline Group: a leading jewelry manufacturer with facilities in Rhode Island and New York.
Stuller: provides jewelry and jewelry-related products with manufacturing in Louisiana.
Rio Grande: offers tools, supplies, and equipment for jewelers with manufacturing in New Mexico.

Vegetables, Fruits, and Nuts:

Dole Food Company: a major producer of fruits and vegetables with operations in California, Arizona, and Hawaii.
Chiquita Brands International: known for its bananas but also produces other fruits with US-based operations.
Ocean Spray: a grower-owned cooperative producing cranberries and other fruit products with operations in Massachusetts and Wisconsin.

Machinery and Transport Equipment:

Caterpillar: a leading manufacturer of construction and mining equipment with production facilities in Illinois, Indiana, and Texas.
Deere & Company: manufactures agricultural machinery with factories in Illinois, Iowa, and Georgia.
Boeing: a major aerospace company with production facilities in Washington, South Carolina, and Missouri.

Mineral Fuels:

ExxonMobil: a major producer of mineral fuels with operations in Texas, New Mexico, and Alaska.
Chevron: another significant producer of mineral fuels with operations in the US.
Peabody Energy: a leading coal producer with operations in Wyoming, Illinois, and Indiana.

Manufactured Goods:

3M: a diversified manufacturer with a wide range of products and production facilities across the US.
Honeywell: provides technology solutions for various industries with manufacturing in multiple US states.
General Electric: focuses on aviation, healthcare, and power with manufacturing facilities in the US.

Food:

Tyson Foods: a leading meat processor with production facilities in Arkansas, Texas, and Iowa.
PepsiCo: produces a variety of food and beverage products with manufacturing throughout the US.
Kraft Heinz: manufactures food products with factories in multiple US states.

Chemicals:

Dow: a major chemical company with production facilities in Texas, Louisiana, and Michigan.
DuPont: provides chemical solutions for various industries with manufacturing in multiple US states.
BASF: a global chemical company with production facilities in the US.

Smartphones, Digital Automation Systems, Lithium Batteries, Display Monitors, Computer Accessories:

While these categories are still heavily reliant on imports, several US-based companies are working to increase domestic production. Some notable examples include:

IBM: focuses on hybrid cloud and AI with manufacturing in New York and California.
Hewlett Packard Enterprise: provides edge-to-cloud solutions with manufacturing in Texas and California.
Dell Technologies: offers IT infrastructure solutions with manufacturing in Texas and North Carolina.

This list is not exhaustive, and many other US-based companies are involved in manufacturing these goods within the United States. The ongoing efforts to bring manufacturing back to the United States are complex and multifaceted, and it remains to be seen how successful these efforts will ultimately be.

By RR, General Assets Research Center

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