Introduction

Sectors are most vulnerable to protectionist trade policies when their competitiveness depends on cross-border supply chains, imported intermediate inputs, or reliable access to foreign markets. Tariffs and trade remedies have expanded in coverage and frequency through 2024–2025, reinforcing exposure for industries where policy measures are repeatedly used to influence sourcing and production location rather than to address temporary disruptions.¹²

Sectors most vulnerable to protectionist trade policies

1. Automobiles and auto parts

Automotive production is organized through integrated regional value chains with high cross-border trade in intermediate goods. Tariffs, tighter rules of origin, and local content requirements increase the cost of imported components and reduce sourcing flexibility. Because production is capital-intensive and model-specific, adjustment typically occurs through changes in sourcing patterns and production location rather than short-term volume reductions. Exposure is higher for electric vehicles due to the cost share and sourcing concentration of batteries and related components.³⁴

2. Clean energy manufacturing and equipment

Clean energy manufacturing is exposed primarily through policy-linked market access rather than border tariffs alone. Domestic content requirements and subsidy eligibility conditions influence procurement and investment decisions, often favoring local production over imported inputs. These measures alter cost structures and supply-chain organization, reducing scale efficiencies and increasing fragmentation across markets.³⁵

3. Semiconductors, electronics, and ICT equipment

Semiconductors and electronics production involve sequential, specialized stages distributed across multiple economies. Trade restrictions affecting inputs, equipment, or intermediate goods disrupt coordination across production stages and raise compliance and adjustment costs. Limited short-term substitutability of suppliers increases reliance on inventory accumulation, production duplication, or investment reallocation, resulting in higher costs and reduced efficiency under sustained restrictions.⁵

4. Metals and basic materials

Steel, aluminum, and related basic materials are among the most frequently targeted sectors for tariffs and trade remedies. Measures are commonly associated with excess capacity, import surges, and injury to domestic producers. When applied across large trade volumes, such measures tend to raise domestic prices and redirect trade flows.¹

5. Agriculture and processed food

Agriculture is treated as a sensitive sector in trade policy and is frequently subject to tariffs, safeguards, and other border measures. These instruments can be adjusted relatively quickly, increasing uncertainty for export-oriented producers with limited market diversification. Processed food products face additional exposure through tariff escalation and restrictions on imported agricultural inputs, which affect margins and competitiveness.¹

6. Critical minerals and mineral-dependent manufacturing

Manufacturing activities dependent on critical minerals are exposed to trade measures applied upstream, including export restrictions and preferential sourcing requirements. Given the concentration of processing and refining capacity, such measures affect input availability and costs for downstream industries. This exposure is transmitted across value chains, particularly in batteries, electronics, and other advanced manufacturing sectors.⁴⁶

Conclusion

Vulnerability to protectionist trade policies is highest in sectors that combine cross-border production networks with high capital intensity and limited short-term substitution. Automobiles, clean energy manufacturing, semiconductors and electronics, metals and basic materials, agriculture, and mineral-dependent industries are repeatedly affected by tariffs, trade remedies, local content requirements, and other border measures.