Impacts of Tariffs on Industry

The imposition of new tariffs on a wide variety of goods and nations has been among the highest-profile policies of the Trump administration. Functioning broadly as a tax on goods entering the U.S. from foreign markets, tariffs are directly impacting sectors such as agriculture, housing, transportation, and economic development.

Rising construction costs, partially due to tariffs, are leading to higher home prices and worsening the ongoing housing crisis. According to the National Association of Home Builders, tariffs on raw materials such as lumber, steel, and aluminum are adding nearly $11,000 on average to the costs of new home construction. Additional tariffs on furnishings and goods, such as vanities and cabinets, imposed in October 2025 threaten to further increase housing costs. Combined with rising construction labor costs and shortages, there are few signs that home prices are likely to moderate or decline in the near term.

Rising food prices have been a global hallmark of the post-COVID inflationary period, and tariffs are now driving up the costs of farming and threatening the stability of the U.S. agricultural sector even further. As the Trump administration has imposed tariffs on foreign markets, retaliatory measures have targeted American agricultural exports. The U.S. lost its primary market for soybeans when China halted all soybean purchases during the 2025 U.S.-China trade war, but a November trade agreement reestablished the flow of agricultural goods. In December 2025, the White House announced plans to use $12 billion of tariff revenues for a farmer aid package, potentially offsetting these challenges.

The transportation sector also isn't immune to rising costs and tariff impacts. In 2025, costs rose for both transportation infrastructure and modes of transportation. U.S. auto manufacturing has been affected, given the globalized nature of this sector, and in October, the average cost of a new automobile topped $50,000 for the first time. Bicycle prices are climbing due to tariffs and trade pressures, prompting at least one e-bike manufacturer to halt shipments to the U.S., though a November tariff drop may lower prices in 2026. Tariffs are also making trains and buses more expensive to build and maintain, as they rely on foreign-made components and are largely made overseas.

It is difficult to evaluate the definitive long-term impacts of tariffs even in 2026, given continuing international negotiations and ongoing legal challenges to presidential tariff authority. Planners should be aware of how these developments may further impact the economic health and well-being of their communities as trade and tariff policies continue to evolve.