Tariffs and US energy security have boosted the attractiveness of manufacturing in the US. But so too has US economic growth, which continues to outperform other key markets. High value-added or advanced manufacturing, within which we group tech, electronics, transport and power-related sectors, has significantly outperformed other sectors. We expect this story to continue. As more countries increase military spending, US defence companies may benefit from strengthening order books.
Traditional, labour-intensive, commoditised manufacturing sectors will continue to shrink under pressure from foreign competitors. Here, tariffs are not enough to provide the competitiveness boost needed to offset the high cost of producing in the US. These US producers are also often adversely affected in foreign markets by retaliatory tariffs.
Source: think.ing.com
