SCG Tariff Overview

Manufacturing

Manufacturers, particularly those that are part of complex global supply chains, are heavily impacted by tariffs. These companies require financing to manage increased costs and adapt their business models. 

• Automotive and auto parts: The industry is highly exposed to tariffs, with complex supply chains that often cross multiple borders. Tariffs on steel, aluminum, and imported parts can dramatically increase production costs. Automakers may seek financing to redesign supply chains, shift production, or cover a portion of these costs rather than passing all of them on to consumers.

• Consumer electronics: Producers of computers, phones, and other electronics rely on components sourced from various countries, making them vulnerable to tariffs. Companies may need financing to manage the higher costs of components and re-evaluate sourcing strategies.

• Heavy machinery and equipment: Industries that produce machinery for construction, mining, and energy, or commercial equipment for kitchens, face higher raw material costs due to tariffs on metals. Financing can help them manage the increased input costs. 

Agriculture

The agricultural sector is often a target of retaliatory tariffs, which can reduce export markets and revenue for farmers. This creates a need for financing to bridge gaps in income and find new markets. 

• Soybeans, dairy, and pork: Tariffs imposed on exports to major markets like China have historically led to significant revenue loss for farmers in these sectors. Producers have required financial assistance to stay afloat and seek new buyers.

• Agricultural inputs: Farmers may also face tariffs on imported equipment or fertilizer, further increasing their operational costs and the need for financing. 

Retail and consumer goods

Companies that import and sell consumer products are among the most affected by tariffs. They often operate on thin profit margins and are forced to absorb tariff costs or pass them on to consumers, which can suppress sales. 

• Apparel and footwear: With a large portion of their products being imported, retailers and brands face significant cost increases from tariffs. Financing is often needed to manage cash flow and potentially re-source products from different countries.

• Furniture and home goods: Similar to apparel, these products are often imported, leaving retailers vulnerable to tariffs. Companies may seek financing to manage costs and potentially invest in diversifying their supplier base. 

Technology and finance

While less directly impacted than manufacturing or agriculture, certain segments of these industries require financing to navigate supply chain disruptions and market uncertainty caused by tariffs. 

• Semiconductor and chip firms: The global chip industry has complex supply chains, and tariffs on key components can lead to increased costs and potential project financing needs.

• E-commerce platforms: Companies that rely on cross-border sales and low-cost shipping, such as some Chinese e-retailers, are vulnerable to tariffs on low-value shipments. This can reduce demand and require financial strategies to adapt. 

Industrial and basic materials

Industries focused on raw materials and industrial production can also be negatively impacted by broader trade tensions. 

• Metals and mining: While some domestic producers may benefit from tariffs, many companies in this sector face a drag from a weaker global growth outlook and supply chain disruptions resulting from tariffs.

• Green energy: Companies in the renewable energy sector, which rely on imported machinery and components for solar and wind power, may need financing to offset higher input costs resulting from tariffs.