The declaration by President-elect Trump that he intends to place a 10% tariff on all imports from China and a 25% tariff on all imports from Canada and Mexico is another sign that firms, investors and policymakers should prepare for more supply chain stress.
In particular, automakers and their suppliers will need to gird for rising prices inside their North American supply chains should the president-elect follow through on these threats.
Read more of RSM’s insights on the economy and the middle market.
The Trump tariff losers index, developed by UBS and derived from a basket of equities, captured the supply chain stress during the pandemic era and is poised to turn upward should the threats of new tariffs become policy action.
It is important to note that if these tariffs become real, Trump would be abrogating the United States-Mexico-Canada Agreement, which he negotiated during his first term and is scheduled for review in 2026.
The data in the index illustrates what those who have exposure to North American and Chinese supply chains understand: That some industries will be affected more than others.
Motor vehicles and auto parts, aircraft manufacturing, petroleum imports, electronics, agriculture, plastics, medical instruments and non-ferrous metals all figure to be affected by a significant increase in import taxes.
The onset of tariffs would also mean that it would be time to begin unpacking each item by its NAICS codes and estimate the intra-industry hit to overall growth as well as the tariffs’ impact on inflation.
