By early 2026, the AGC reported aluminum mill shapes up 33% year-over-year. Steel mill products up 20.7%. Copper up 15.7%. These aren't projections — they're measured increases in what U.S. contractors are paying for raw materials.
Tariff exposure isn't distributed evenly across industries. Construction and manufacturing sit at the top. Retail and services barely register. Here's how it actually breaks down.
How Tariffs Hit Industries Differently
Three variables determine tariff exposure for a given industry:
- Import intensity — What share of inputs are imported or priced against imported benchmarks?
- Substitutability — Can the business switch to domestic suppliers, and at what cost premium?
- Pass-through ability — Can the business raise prices to offset tariff costs, or are prices set by contract or competition?
A construction contractor bidding a fixed-price project six months out faces all three problems simultaneously. A software company buying cloud compute faces essentially none.
The Tariff Exposure Index
| Industry | Import Intensity | Pass-Through Ability | Net Exposure | 2026 Impact |
|---|---|---|---|---|
| Construction | Very High | Low (fixed contracts) | 🔴 Critical | +8–15% project costs |
| Manufacturing | Very High | Moderate | 🔴 Critical | +5–25% COGS |
| Energy | High | Moderate | 🟠 High | +10–20% equipment costs |
| Agriculture | High (equipment) | Low (commodity prices) | 🟠 High | Margin compression |
| Retail (physical goods) | High (China sourcing) | Moderate | 🟠 High | +5–15% COGS |
| Automotive | Very High | Moderate | 🟠 High | +$2,000–$10,000/vehicle |
| Healthcare | Moderate (devices) | Low (insurance contracts) | 🟡 Elevated | +3–8% device costs |
| Real Estate | Moderate (materials) | Moderate | 🟡 Elevated | +5–12% construction costs |
| Finance / Insurance | Low | High | 🟢 Low | Minimal direct exposure |
| Technology (SaaS) | Low | High | 🟢 Low | Minimal direct exposure |
| Professional Services | Very Low | High | 🟢 Low | Negligible |
Construction: The Hardest-Hit Industry
Construction is uniquely exposed because it sits at the intersection of two tariff problems: imported raw materials (steel, aluminum, copper) and imported components (HVAC systems, electrical panels, curtain wall systems).
The June 2025 Section 232 tariffs raised steel and aluminum duties to 50%. By early 2026:
- Aluminum mill shapes: +33% YoY (AGC data)
- Steel mill products: +20.7% YoY
- Copper/brass mill shapes: +15.7% YoY
A June 2025 Oxford Economics study estimated effective tariff rates would raise aggregate construction costs roughly 8% under current policy — with ranges of 5–25% depending on material mix.
The contractual problem makes this worse. Contractors who bid fixed-price projects six months ago are absorbing those increases. The ones who survive are those who built material escalation clauses into new contracts.
What to do about it:
- Add material escalation clauses to all new fixed-price bids
- Pre-purchase key materials when bids are accepted
- Source domestic steel and aluminum where margin allows — domestic producers have raised prices to match the tariff floor anyway, but lead times are more predictable
Construction startup resources → | Tariff calculator →
Manufacturing: Deeply Embedded Exposure
Manufacturing is the industry where tariff exposure is most structurally embedded. The U.S. manufacturing supply chain was built over decades of free trade — most of the specialty components, rare earth materials, and precision parts that feed U.S. factories have no domestic equivalent at scale.
The substitution problem: Some inputs can be sourced domestically, but at 20–40% price premiums and with delivery lead times measured in months, not weeks. The transition takes capital that most small manufacturers don't have.
2026 sector breakdown:
| Manufacturing Sub-Sector | Primary Tariff Exposure | Estimated Cost Impact |
|---|---|---|
| Automotive parts | Steel, aluminum, semiconductors | +$1,500–$5,000/vehicle |
| Electronics | China components, rare earths | +8–22% COGS |
| Industrial equipment | Steel, specialty metals | +10–18% COGS |
| Food processing equipment | European/Asian machinery | +5–12% |
| Aerospace | Titanium, carbon fiber | +12–25% COGS |
The SBA's Made in America Loan Guarantee (90% guarantee, launched March 2026) is worth knowing about — it's specifically designed to help manufacturers recapitalize under these conditions.
Energy: Equipment Costs Compound Operational Risk
Energy's tariff exposure comes from two directions: imported solar panels and wind turbine components face direct duties, and energy infrastructure equipment (transformers, pumps, turbines) is largely imported.
The compounding factor in 2026: a Gulf energy disruption (unrelated to tariffs) added shipping cost volatility on top of tariff-driven price increases for equipment. The AGC noted this was hitting construction projects dependent on energy infrastructure installation.
Solar and renewables: Tariffs on Chinese solar panels have been in place since 2018 and were extended. New Southeast Asian exemptions expired in mid-2025. Solar project developers are facing 25–45% module price increases depending on sourcing.
Traditional energy: Drilling equipment and completion components face moderate exposure. Offshore platform components face the highest tariff burden.
Retail: The China Dependency Problem
Retail's tariff exposure is heavily dependent on one question: how much of your inventory comes from China?
For general merchandise retailers (home goods, apparel, consumer electronics), China-sourced inventory faces 145%+ tariffs under current policy. Many retailers have spent 2023–2025 diversifying to Vietnam, Cambodia, and Mexico — but those shifts take years and cost capital.
Direct-to-consumer e-commerce has been disproportionately hit. The de minimis exemption ($800 threshold) that allowed Chinese e-commerce platforms to ship duty-free was eliminated in early 2025. This raised effective tariffs on low-value imports by 120–145%.
Finance, Tech, Services: Effectively Insulated
Industries that sell information, financial instruments, or labor-based services have minimal tariff exposure. Their cost structures are dominated by human capital (salaries) and software (cloud infrastructure) — neither of which is tariffed.
The indirect exposure: if tariffs cause a recession or reduce consumer spending, demand for services contracts. But that's a macro risk, not a direct tariff cost.
How to Calculate Your Exposure
If you want to quantify tariff exposure for your specific business:
- Map your inputs — List the top 10 cost inputs by dollar amount
- Classify each input — Is it domestically produced? Imported? From a tariff-affected country?
- Find the tariff rate — HTS codes determine the applicable rate; use CBP's online lookup
- Model pass-through — Can you raise prices? Are you in fixed contracts?
- Stress-test margins — Model a 10%, 20%, and 30% cost increase scenario