President Donald Trump’s plan to impose tariffs on aluminum and steel imports is a near-term credit positive for steel producers, but it will hurt steel-consuming manufacturers and their workers, who greatly outnumber steelworkers, Moody’s Investors Service said Friday.

There are about 140,000 steelworkers in the U.S., according to the American Iron & Steel Institute, and about 6.5 million workers in steel-consuming manufacturers, Moody’s analysts wrote in reports published Friday.

“Workers in these consuming sectors will likely be hurt by higher steel prices,” they said. “Domestic manufacturers could also eventually switch to importing whole components of finished products that are made from steel to reduce their product costs, which would lead to reduced domestic steel demand in the long term.”

Trump said Thursday he would impose a 25% tariff on steel imports and a 10% tariff on aluminum. The news sent stocks tumbling, as investors braced for the possibility of a trade war. The tariffs are likely to boost prices of both metals in the U.S., weighing on all those manufacturers that need them as raw materials.

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Raw-material prices have already been rising in response to growing demand. Diversified industrial companies are currently enjoying rising sales and EBITDA (earnings before interest, taxes, depreciation and amortization) growth, thanks to the strong global economy, which has helped companies exposed to commodities dig their way out of a prolonged trough. That will help offset any impact from rising input costs, said Moody’s.

However, “protectionist trade policies, including tariffs on raw-material imports, could exacerbate these inflationary pressures, running the risk of tighter margins and possible supply-chain disruptions in the manufacturing sector,” said the agency.

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The industries most at risk are equipment makers and component suppliers in the aerospace and transportation and automotive sectors. These include aluminum parts makers that are suppliers to the aerospace and car sectors, as well as steel parts makers selling to sectors such as railroads, trucking, energy and construction.

Companies that supply parts to those sectors include Visteon Corp. VC, -8.04% , Delphi Technologies PLC DLPH, -4.24% , Cummins Inc. CMI, -3.79% , Honeywell Inc. HON, -4.34% , United Technologies Co. US:UTX, Johnson Controls Inc. JCI, -4.37% , Lear Corp. LEA, -4.78% , Dana Holding Corp., BorgWarner Inc. BWA, -4.07% , Goodyear Tire and Rubber Co. GT, -6.63% and Alcoa Corp. AA, -7.65% .

The bigger components makers often have provisions in their supply contracts that allow them to pass through rising raw-material costs, but smaller companies operating in highly competitive and fragmented markets will likely struggle.

“Although contractual mechanisms will help many manufacturers, we nonetheless expect that even well-protected companies will have to contend with a lag between the time that input costs rise and customer prices can be reset,” said Moody’s. “During this brief period, margins will tighten, particularly where last-in-first-out (LIFO) inventory reporting is employed.“

Cash flow will shrink as companies increase working capital for more expensive inventory.

Companies will have to raise prices, making it harder to compete in export markets, and possibly encouraging some companies to move part of their business overseas — at the cost of American jobs.

“A possible workaround would be to increase foreign manufacturing and ship from the foreign location. This would require additional investment and time, but for those companies that had already considered expanding their foreign manufacturing base, the tariffs may make the decisions easier,” said the analysts.