The manufacturing sector is the most affected by tariffs, according to recent report

The manufacturing sector is the most affected by tariffs

Although tariffs have not been as high as initially proposed, there is still a possibility they could lead to price increases and a slowdown in economic growth, especially as their effects spread more broadly across the global economy.

President Trump argues that revenue generated by tariffs will help reduce the budget deficit and promote job creation in domestic factories, while minimizing the risks of widespread price increases. However, a June survey by the Federal Reserve Bank of Atlanta indicated that, on average, companies would pass on about half of the tariff costs to American consumers through price increases, according to Transport Topics.

The analysis by the Washington Center for Equitable Growth aims to demonstrate how the potential economic and political costs could affect critical sectors such as manufacturing, construction, mining, and maintenance of oil infrastructure—industries that are highly dependent on imports and a stable supply chain.

According to the Center’s data, manufacturing industries, including vehicle production, will face rising input costs due to the very tariff regime intended to enhance their competitiveness against imported goods.

The analysis found that the manufacturing industry would be the most vulnerable industrial category, regardless of the specific characteristics of the products or the countries targeted by a given tariff regime. While some subsectors will be more affected than others, the overall dependence of the sector on imported inputs means the manufacturing industry will face higher intermediate tariff costs compared to other industries. In fact, of the 25 most tariff-impacted subsectors in the U.S. economy, 19 belong to manufacturing, according to Bangert-Drowns.