Economy experts say Indiana steel manufacturing companies may initially benefit from President Donald Trump’s steel and aluminum tariff proposal.
Wally Tyner, energy economist and Purdue professor of agricultural economics, says adding the tariffs on products essential to the state’s automotive industry could create an inverse relationship for Indiana jobs.
“The cost of those goods go up, they sell fewer of them, they need to make fewer, jobs go down,” Tyner says. “So, in Indiana you have people who win and people who lose. It turns out you have more companies and jobs on the side that loses than wins.”
Tyner says the proposal could ignite trade wars between countries, restricting products that are essential to the state’s economy.
“The retaliation is often political as much as it is economic,” he says. “hey want to hurt rural areas that are key to Trump’s support base.”
Tyner says four of the largest exporting communities in the country affected by the tariffs are in Indiana, which include Lafayette, Kokomo, Columbus and Elkhart. They could be impacted due to the heavy automotive and engine industries they support.
China imports more than half of Indiana’s exported goods, including US soybeans. So, Tyner says he feels countries like China could respond by intentionally targeting Indiana markets.
“Any economist would tell you that when you start slapping tariffs on, everybody loses except the very industry that is protected by those tariffs. Everybody else in the economy loses,” he says.
Local leaders have voiced their opinions on the steel and aluminum tariffs proposed last week by Trump. Republican Sen. Todd Young released a statement on Twitter sharing his thoughts on the proposed tariffs:
— Senator Todd Young (@SenToddYoung) March 8, 2018
Democratic Sen. Joe Donnelly released the following statement on his website regarding Trump’s tariff announcement:
“Trade is critical for Indiana’s economy—from our manufacturers to our farmers—but it must be fair. For too long Hoosier workers have fought unfair competition from countries like China. I’m pleased that President Trump is taking action, and I plan to carefully review the details of his proclamations. It’s important that we get this policy right, so that American steel and aluminum producers and their workers can compete on a level playing field and continue to support good-paying jobs.”
Indiana Gov. Eric Holcomb has not yet released a statement regarding the proposed tariffs.