Written By JR Robinson

In 2025, Tennessee finds itself at the nexus of sweeping federal economic changes. The passage of the “Big Beautiful Bill” — a cornerstone of President Donald Trump’s domestic policy — and a series of aggressive new tariffs are reshaping the state’s industries, workforce, and cost of living. While supporters argue these policies aim to strengthen American manufacturing and reduce dependence on foreign supply chains, Tennesseans are experiencing both opportunities and significant challenges as these measures take hold.

Tennessee’s Economic Landscape and Manufacturing Sector

Historically, Tennessee has stood as a manufacturing powerhouse, ranking sixth nationally for clean manufacturing investment and home to robust auto, chemical, aerospace, and energy sectors. Since 2022, federal incentives fueled a surge of local investments in clean energy and electric vehicle (EV) production, revitalizing rural communities and catalyzing job growth. Projects like Ford’s “BlueOval City” in Stanton — a $5.6 billion EV battery plant expected to generate up to 27,000 direct and indirect jobs and inject $1 billion in annual wages locally — exemplify this boom. Similar investments from General Motors, LG, Magna International, and others pushed Tennessee to the forefront of American clean energy manufacturing, with over $18.7 billion invested and 20,735 jobs created since 2022.

Yet, as the Big Beautiful Bill takes effect, many of the incentives underpinning this renaissance are shifting. Restrictions on federal tax credits — including the Advanced Manufacturing Production Credit, credits for wind and solar projects, and the Clean Vehicle Tax Credit — threaten the momentum of these projects. Facilities vital to battery and EV production, as well as solar and clean electricity development, face uncertain futures if scheduled tax credits are phased out or eliminated.

Impact of the Big Beautiful Bill: Changes to Clean Energy, Jobs, and Household Economics

The Big Beautiful Bill is more than a set of tax revisions. It represents the most substantial realignment of federal manufacturing and energy support in years.

1. Manufacturing and Clean Energy

• Investment at Risk: The bill’s new restrictions jeopardize billions in planned and ongoing investments. Projects like BlueOval City and others by Magna International, LG Energy Solution, Hanon Systems, and NOVONIX could see diminished returns or face cancellation if credits and Department of Energy grants are restricted.
• Job Creation and Losses: Between 2022 and 2025, tax incentives enabled the creation of thousands of high-quality, family-supporting jobs across rural and urban Tennessee. Analysts project that scaling back these supports could cost Tennessee nearly 140,000 jobs over the next decade, with an average household income reduction of $160 annually, and a state GDP contraction by $2.4 billion.
• Small Town Revitalization: Projects like those in Stanton and Loudon County — where EV and battery manufacturing supercharged local economies — may lose steam. As investments slow, secondary and tertiary effects ripple through supply chains, local businesses, and community infrastructure.

2. Energy Costs and Residential Impacts

• Rising Energy Bills: The bill’s restructuring of clean energy subsidies means Tennesseans could pay nearly $120 more per year by 2030 and $380 more by 2035 in energy costs. The elimination of the Residential Clean Energy Property Credit will make solar, battery storage, and geothermal upgrades far less affordable, stalling residential clean energy adoption.
• Electricity Generation: The projected need for 25% more electricity by 2035 collides with reduced incentives for renewable projects, risking supply shortages in peak demand and higher reliance on traditional power sources.

3. Health Care and Nutrition

• Health Insurance and Medicaid: The bill’s failure to extend enhanced premium tax credits for Affordable Care Act plans means many Tennesseans could face significant premium hikes. A 55-year-old earning $63,000 annually could see health insurance costs rise by over $5,000 per year. Medicaid cuts may result in coverage losses for tens of thousands statewide, exacerbating uncompensated care burdens in rural hospitals (13 at immediate risk of closure), especially troubling given Tennessee’s persistent rural health disparities.
• Food Costs and Assistance: The Big Beautiful Bill introduces the largest cut ever to the Supplemental Nutrition Assistance Program, as well as more stringent paperwork for recipients. Tens of thousands of Tennesseans face immediate risk of losing some benefits, straining grocery budgets while food prices for staples like bananas and coffee have risen over 5% since early 2025.

4. Public Budgets and Local Economies

• Government Revenue Declines: Reduced Medicaid and SNAP support could result in an estimated 19,200 lost jobs in 2029, and $167 million less in tax revenue for Tennessee, shrinking public funds for schools, social services, and local development.
• Increased Financial Pressure on State: Tennessee will be required for the first time to share certain SNAP costs, potentially $161 million annually, and pay up to $61 million more for administrative costs by 2027. Local SNAP retailers — over three dozen — may see drops in clientele and increased instability.

The Tariff Landscape: Price and Production Impacts

As Tennessee’s second-largest economic sector, manufacturing — especially auto and industrial exports — is deeply exposed to trade policy shifts. Trump’s new “general 10% tariff” on imports, coupled with country-specific rates up to 145% on Chinese goods and 20% on Taiwanese imports, is hitting hard.

Factory Closures and Job Losses

• Recent Layoffs: The latest wave of tariffs coincides with plant closures: Bridgestone shuttered its La Vergne facility, costing 700 jobs. Adient exited two auto parts plants, eliminating over 400 positions. Perdue Farms closed its Monterey poultry plant, laying off 433 workers.
• Statewide Employment: Since January 2025, Tennessee lost over 3,300 manufacturing jobs and 3,400 construction jobs — a significant shift for communities dependent on these industries.

Supply Chain Disruption and Price Inflation

• Cost of Goods: Tennessee is the nation's fourth-largest importer of Chinese products, with electronics, machinery, vehicle parts, and pharmaceuticals making up the bulk. Businesses and consumers now face higher prices — for both imported goods and goods produced locally whose supply chains depend on foreign components.
• Business Restructuring: Automakers like Audi and Mercedes-Benz are reconsidering plant expansions and reshoring, aiming to avoid multibillion-dollar hits from tariffs. Some automakers plan new Tennessee factories; others may pause production or shift models to keep prices competitive.

Trade-Offs for Farmers and Exporters

• Agriculture: Tennessee exported $3.2 billion in goods to China last year; tariffs on U.S. goods (now up to 125%) threaten local farmers and food processors whose largest foreign market just became dramatically less accessible.
• Rural Impact: Trade tension affects small towns especially, where both export agriculture and manufacturing drive local economies.

Household and Community Effects

While arguments persist on long-term macroeconomic benefits, everyday Tennesseans are feeling immediate impacts:

• Electricity and Gasoline Costs: Electricity prices are projected to rise by $210 per year starting in 2026, and gasoline by $60 per year by 2030. Energy-efficient home upgrades, previously subsidized, will become thousands of dollars more expensive.
• Education and Borrowing: Student loan borrowers face higher monthly payments ($210 to $380 more), and homebuyers could pay an extra $430 annually on mortgages, with small business borrowers incurring up to $560 more annually in loan costs — all attributable to interest rate hikes linked to federal deficit expansion under the bill.

Local Innovation and Resilience

Despite these headwinds, Tennessee’s business and civic leaders remain focused on adaptation. Employers are investing in workforce retraining, STEM education, and technical programs to position workers for new opportunities as industries evolve. Local governments and nonprofits are working to buffer vulnerable populations from cuts to health care and food assistance.

Innovative companies and trade groups are seeking ways to maintain Tennessee’s competitiveness — whether by investing in domestic production, shifting supply chains, or exploring new markets less affected by tariffs.

Wrap Up

The impact of the Big Beautiful Bill and related tariffs is multifaceted. For Tennessee, they bring a mixed legacy: an initial renaissance in clean energy and manufacturing, now threatened by reduced incentives and global trade friction. Job creation faces new fragility, and costs are rising for health care, energy, food, and borrowing. As the full effects play out, much will depend on local leadership, business investment, and federal adjustments. Tennesseans, resilient as ever, are navigating this period of uncertainty and transformation — seeking the right balance between economic growth, affordability, and community well-being.