United States / Analyst Insights
Top Industries Exposed to China’s Retaliatory Tariffs
by Robert Miles Analyst
Sep 19 2018

As the trade dispute between the United States and China evolves, an increasing number of product classes have become involved in the conflict. In response to the latest round of tariffs on Chinese goods, China has issued tariffs on more than 5,000 products at between 5.0% and 10.0%, set to go into effect September 24. With this latest escalation, Chinese tariffs are approaching coverage of all US imports. What this means for US industries, however, depends on their own unique operating conditions.

Top Five Industries

With more than 5,000 products covered by this round of tariffs, several industries have a large number of their individual export commodities exposed. However, this does not always spell bad news for the industry. For example, the Organic Chemical Manufacturing industry (IBISWorld report 32519) has a wide-ranging array of products that are subject to very specific commodity definitions. These commodities are covered extensively in the latest tariff round, which could be problematic for an industry that derives an expected 29.8% of its $133.2-billion revenue from exports. Despite this, only 8.0% of exports travel to China and the industry has a well-diversified export portfolio.  On the other end of the spectrum is the Wood Pulp Mills industry (IBISWorld report 32211). This industry derives 97.4% of its $6.0-billion total revenue from exports. Of these exports, 27.3% are destined for China.

China Share

While the direct effect on industries is subject to unique circumstances, as the list of tariffs grows the ramifications of trade restrictions are likely to be magnified and reverberate through other industries. In total, this latest round of tariffs will reach 186 industries. Although some industries are more exposed than others, the breadth of tariffs should force companies in all of these industries to examine their supply chains and adjust production accordingly.