Industries Benefitting from Increased U.S. Import Tariffs

As global import tariffs increase drastically, several key industries and companies may be positioned to benefit. This shift towards protectionist policies may likely impact various sectors differently, with some potentially flourishing under new trade barriers while others encounter significant challenges.

In the U.S., domestic manufacturing stands out as a sector that may be poised to see significant gains due to increased import tariffs.

Automotive, Apparel & Aluminum

In the automotive industry, for instance, domestic automakers such as Ford and General Motors could be positioned to benefit significantly from global tariffs. If higher tariffs dampen the imported vehicle market, domestic companies may ultimately capture a larger share of the automobile market. This in turn could trigger increased investment in local production facilities, which may give them a competitive edge.

The domestic apparel industry — represented by companies such as HanesBrands, New Balance, and others — may also see a surge in demand. This shift could lead to additional job creation and a potential revitalization of some U.S.-based manufacturing hubs.

Similarly, higher import tariffs on steel and aluminum could also benefit domestic producers such as Nucor Corporation and United States Steel Corporation. These companies could see an increased demand (and potentially higher prices) for their products, which may in turn boost their revenue and market presence.

The Tech Hardware, Machinery, Agriculture & Energy Sectors

In the technology hardware sector, companies such as Intel and AMD, which manufacture semiconductors domestically, could see increased demand as tariffs result in higher prices for foreign-produced semiconductors. This may even lead to greater investment in local production capabilities as well as increased R&D. Machinery manufacturers such as Caterpillar and Deere & Co. could also benefit from foreign producers who could be priced out of the market due to increased tariffs on imported machinery, which may drive domestic demand and support the growth and profitability of U.S. manufacturers.

The agricultural sector could also stand to gain from higher import tariffs. The farm equipment sector (which includes the previously mentioned Deere & Co.) may benefit from higher tariffs on imported machinery. This shift could result in increased sales of domestically produced farm equipment and potential expansion in manufacturing capabilities. Food giants such as Tyson Foods and Archer Daniels Midland may see a rise in demand for their products as tariffs force foreign agricultural companies to raise prices, which could also encourage investment in local agriculture and food processing industries.

The energy sector — particularly oil and gas — represented by giants like ExxonMobil and Chevron, could potentially gain from higher tariffs on imported energy. The protectionist measure that tariffs represent could drive domestic energy production, leading to possible reduced reliance on foreign energy sources.

Companies such as First Solar may also benefit from increased demand for domestically produced renewable energy technologies. Higher tariffs on imported solar panels and related equipment may drive growth in the domestic renewable energy sector. The energy equipment and services sector, which includes companies such as  Halliburton and Schlumberger, may also see an increased demand for their products and services. Higher tariffs on imported equipment could also encourage local sourcing, which may support domestic industry growth.

Domestic Semiconductor Producers, Blockchain & Gaming

Increased import taxes may also benefit domestic semiconductor producers, such as Intel and AMD. Should foreign semiconductors become more expensive, it could trigger a push towards local production, leading to a potentially fragmented global supply chain.

Domestic firms such as Qualcomm and Cisco Systems might also benefit from reduced competition from their foreign counterparts. As countries develop their local telecom equipment manufacturers, global giants such as Huawei could be impacted. Meanwhile, Apple might face increased costs due to tariffs, but the tech giant could also benefit from incentives that encourage bringing more of its production to the U.S.

Protectionist policies may push other tech giants to diversify their manufacturing bases beyond China to mitigate risk. Domestic corporations such as Amazon, Microsoft, and Google, meanwhile, might gain from incentives to build more data centers in the U.S., which could result in a more localized approach to cloud infrastructure, impacting global cloud computing dynamics.

Higher import taxes on graphics processing units (GPUs) and mining equipment could increase costs in those areas, potentially benefiting U.S.-based manufacturers such as Nvidia and AMD. Domestic blockchain firms may also benefit from protectionist policies if they receive incentives to develop local blockchain infrastructure. Nvidia, AMD, and Sony could see shifts in production locations to avoid tariffs.

Players in the gaming software industry may witness dramatic shifts. For instance, if Sony produces Playstations in Japan and exports them, then the company may experience a dip in sales due to higher prices triggered by tariffs. On the other hand, gaming software companies may be able to sidestep barriers because they can sell their products through Xbox, Playstation, and PCOnline platforms, which will allow them to reach global audiences despite import tariffs.

Increased global import tariffs and protectionist policies may well benefit domestic industries, particularly those in manufacturing, agriculture, and energy. Technology sectors such as semiconductors, telecommunications, consumer electronics, cloud computing, and AI may need to adjust their production and supply chain strategies.

Those companies that run monopolies within their industries and their countries of origin may be positioned to thrive in a rising tariff environment. However, it is also easy to imagine organizations such as Samsung and Apple losing profits, while digital offerings such as software-only products (eg. gaming, graphic design), may be better positioned to succeed.

Are you seeking additional investment insights? The Avestix team offers decades of collective, global investment experience across multiple investment sectors. Contact us today.