Tariff Pain Spreads Across Tennessee As Trade War Continues to Escalate

QUOTE FROM BRANDON WHITT, RUTHERFORD COUNTY VICE PRESIDENT, TENNESSEE FARM BUREAU: “Tennessee farmers are worried whether we can turn a profit and stay in business – not just for the next year, but for the next generation. Trade has given us the opportunity to expand to new markets and sell our commodities overseas, but tariffs are closing those markets off quickly. If the trade war doesn’t end soon, we could lose those markets for good and do permanent damage to farming and agriculture in Tennessee and across the country.”

FACING INCOME SLUMP, FARMERS NOW LOSING MARKETS TO FOREIGN COMPETITORS. “As China and Europe have retaliated against steel and aluminum tariffs levied by President Donald Trump with their own tariffs on U.S. goods, farmers have taken a hit. Tennessee soybean farmers have seen purchases from China stall, exacerbating the financial pressure from a five-year slump in farm income. … Soybeans were Tennessee’s largest crop in 2016, with exports totaling $422 million. China represents 30 percent of the U.S. soybean market, according to Tennessee Farm Bureau officials. Wells said China will likely turn to Brazil for soybeans or reduce the country’s intake with tariffs on U.S. soybeans.” (Jamie McGee, “Tennessee’s Soybean Farmers Favor Free Market Over Trump’s Aid,” Nashville Tennessean, 7/24/18)

  • FARMERS WANT TRADE, NOT AID. “For some Tennessee farmers, the $12 billion in aid announced Tuesday by the Trump administration brings some financial relief — but not in the way they would prefer to make ends meet. ‘It will be some relief, but it’s a mixed bag,’ said Parks Wells, executive director of the Tennessee Soybean Promotion Council in Dyer County. ‘We hate to lose the free markets. Farmers thrive on that, not government support. We’ve lost this market because of the policy situation.’ (Jamie McGee, “Tennessee’s Soybean Farmers Favor Free Market Over Trump’s Aid,” Nashville Tennessean, 7/24/18)

TENNESSEE MANUFACTURERS SAY TARIFFS MAKE IT IMPOSSIBLE TO COMPETE WITH FOREIGN COMPANIES. “Executives from six area companies employing more than 1,000 Tennesseans described the significant price increases on steel, both domestic and imported, that they said are impairing their ability to compete against foreign companies. According to the Aug. 13 letter, steel prices are the highest they have been since 2008 and they have increased by 43 percent since this time last year. ‘These employees and our businesses depend on access to competitively priced steel to fabricate our products and compete in a global marketplace,’ the leaders wrote. ‘We cannot compete globally when the cost of our most important input has spiked and delivery times are extended.’” (Jamie McGee, “Tennessee Manufacturers Urge Trump to Rescind Steel Tariffs,” Nashville Tennessean, 8/20/18)

MSTU STUDY: TARIFFS HURT $1.4 BILLION IN TENNESSEE EXPORTS. “Up to $1.38 billion in Tennessee exports could be impacted by tariffs in a deepening trade war, according to a new report from a Middle Tennessee State University professor. Political science professor Steven Livingston recently wrote a report on how products listed as potential targets for tariffs by countries like Mexico, Canada, China and the European Union would impact Tennessee companies.” (Rachel Rippetoe, “MTSU Professor: Nearly $1.4B in Tennessee Exports Could Suffer from Tariffs,” Nashville Business Journal, 8/6/18)

TARIFFS HIT ABOUT ONE-FIFTH OF IMPORTS TO MEMPHIS ALONE. “Tariffs on Chinese products singled out by the White House would impact about 10 percent of the cargo reaching most U.S. ports on average, almost 18 percent of the freight reaching Memphis. … Memphis’ outsized share of imports reflects its extensive 55,000-employee logistics hub. Memphis contains the nation’s No. 1 cargo airport, freight depots for river barge lines and the nation’s five leading railroads, more than 100 truck terminals, and thousands of acres of distribution centers operated by major retailers, wholesalers and manufacturers bringing in imports ranging from machine tools to hammers and running shoes.” (Ted Evanoff, “Trump Tariffs in Tennessee Would Hit 18% of Memphis Imports,” Memphis Commercial Appeal, 9/5/18)

  • TARIFFS ON TENNESSEE IMPORTS MEAN LAYOFFS IN MEMPHIS AND HIGHER PRICES NATIONWIDE. “If the proposed tariffs are put in place, the result could lead to higher prices nationwide on consumer items and possible layoffs in the Memphis logistics industry if import volumes fell, University of Memphis economist John Gnuschke said. ‘The truth of tariffs is somebody has to pay the price,’ Gnuschke said.” (Ted Evanoff, “Trump Tariffs in Tennessee Would Hit 18% of Memphis Imports,” Memphis Commercial Appeal, 9/5/18)

TRADE WAR WILL INFLICT MAJOR DAMAGE ON AUTO MANUFACTURING. “The Trump administration’s new tariffs on aluminum and steel and the threat of more duties on imported cars and car parts will weaken the U.S. economy and inflict serious damage on the nation’s auto industry, a panel of trade analysts warned Wednesday. Americans will pay thousands of dollars more for new cars and trucks as a result of the tariffs, and as many as 700,000 workers in the auto industry could lose their jobs, the analysts told a Senate committee.” (Michael Collins, “Tariffs on Imported Cars, Parts Could Harm U.S. Economy and Auto Industry, Experts Warn,” USA Today, 9/5/18)

  • AUTO INDUSTRY EMPLOYS A THIRD OF TENNESSEE’S MANUFACTURING WORKERS. “In Tennessee, the number of auto jobs has nearly doubled, and exports and family incomes have increased under the North American Free Trade Agreement, which eliminated most tariffs between the United States, Mexico and Canada. A third of the state’s manufacturing workforce is now employed in the automobile industry.” (Michael Collins, “Tariffs on Imported Cars, Parts Could Harm U.S. Economy and Auto Industry, Experts Warn,” USA Today, 9/5/18)