Understanding the Manufacturing Impact of the Latest Tariffs
A new round of tariffs announced on April 2 is expected to impact US manufacturing in complex ways. While some industries may benefit, others could face higher costs and increased supply chain challenges. In their most recent blog, The Impact of Tariffs on US Manufacturing Production, ITR Economics takes a macroeconomic look at how these tariffs—particularly cumulative increases on goods from countries like China—are affecting US Manufacturing Production.
Key Tariff Updates as of April 2:
- Tariffs are cumulative. For example, Chinese imports now face a 54% tariff—this combines a previous 20% fentanyl-related tariff with a newly added 34% reciprocal tariff.
- A 10% blanket tariff on all countries goes into effect April 5.
- Individualized reciprocal tariffs will be introduced April 9, targeting specific trade imbalances.
- Canada and Mexico will see no change to existing fentanyl/migration-related tariffs.
- Under USMCA:
-
- Compliant goods remain at 0% tariff.
- Non-compliant goods will face 25% tariffs.
- Non-compliant energy and potash will be taxed at 10%.
-
- Exemptions: Items such as steel, aluminum, auto parts already under Section 232 tariffs, pharmaceuticals, semiconductors, copper, and certain critical minerals are not subject to these new reciprocal tariffs.
Full story: ITR Economics
