New Data Finds Pennsylvania Businesses and Consumers Paying $45 Million More Every Month Because of Tariffs

Hundreds of millions of dollars of products will be hit with additional tariffs, further raising costs

WASHINGTON, DC—Today Tariffs Hurt the Heartland—a nationwide, nonpartisan, grassroots campaign against tariffs—published new data about the costs of tariffs across the states, finding that Pennsylvania was the fifth-highest among all states, in terms of shouldering higher costs. The data was compiled by The Trade Partnership and released by Tariffs Hurt the Heartland during a town hall meeting in Pennsylvania to discuss the tariffs’ impacts, featuring local distillers, pork producers, frame manufacturers and other experts.

Specifically, the data found that Pennsylvania businesses and consumers are paying $45 million per month in extra tariffs. On steel alone, businesses and consumers in the state spent $98 million more on section 232 tariffs. The products hit with the highest tariffs in August were semi-finished steel from Russia, primary aluminum from Canada, rebar (for concrete) from Turkey and forklift parts from China.

Not only are these tariffs costing consumers more for everyday products, but they are impeding access to new markets for Pennsylvanian farmers and business owners. “America’s farmers produce enough food to meet the needs of consumers within our borders and worldwide who desire our high-quality products,” said Juniata County hog and chicken farmer Chris Hoffman. “Tariffs threaten our ability to market our products and directly affect our profitability. It is critically important for U.S. farmers to have access to free markets to remain economically viable.”

“New Liberty Distillery has been looking to expand into new markets in Europe and around the globe. Any price anxiety created due to tariffs makes it that much harder for our company to continue its growth. Hopefully the United States and the EU will come together and resolve the tariff issue quickly,” said Robert Cassell, co-founder and master distiller of the Millstone Spirits Group, based in Philadelphia.

“China is not paying for these tariffs. These taxes are being paid by American businesses, farmers, and families,” said Rebecca Mond, VP, Federal Government Affairs at The Toy Association. “Not only will the taxes negatively impact jobs and put companies out of business, they will hurt families as the prices  rise on just about everything the buy from the toys their kids play with to the food they put on the table.”

Nationwide, the data found that, for the most recent month available (August 2018), the amount of tariffs paid increased by $1.4 billion—or 45 percent—as compared to tariffs paid in August 2017. Tariff costs in Michigan tripled to $178 million, and more than doubled in multiple states—to $424 million in Texas, $193 million in Illinois, $50 million in Alabama, $29 million in Oklahoma, $23 million in Louisiana and $7.3 million in West Virginia. These costs strain businesses of all sizes, but are particularly painful for small businesses, manufacturers and consumers who bear the burden of tariff increases in the form of higher prices.

Graph: Tariffs Paid on Products Subject to Trump Tariffs by Month, all months

Unfortunately, this data is only telling the first part of the story; costs will continue to increase as the other announced tariffs go into effect. For example, the section 301 tariffs have not even kicked in, so we can expect American businesses to see even higher costs in the future.

“This is just the very tip of the iceberg. The data released today offers a glimpse at what the coming pain from the trade war. Once the tariffs on an additional $200 billion in goods kick in, these numbers will continue to trend sharply upward. We are hopeful that this data, combined the personal stories of harm that we’re sharing across America, will encourage this administration to move away from tariffs and to find new solutions to growing access to foreign markets,” said Angela Hofmann, spokesperson for the Tariffs Hurt the Heartland campaign.

In Pennsylvania alone, we are seeing 55 percent higher costs—or $45 million a month—for state businesses from last year to this year. And it’s only going to get worse, once the other tariffs kick in. Continuing to go down this track will only lead to more layoffs and higher prices,” added Hofmann.

The steel and aluminum tariffs have had significant cost implications for the states. The section 232 steel tariffs have cost American companies an additional $1.5 billion, including $475 million in August. Previously, these products were duty free. Imports into these states paid the most taxes for steel subject to the section 232 tariffs: Texas ($389 million), Michigan ($139 million), California ($104 million), Illinois ($103 million), Pennsylvania ($98 million) and Ohio ($77 million).

Lastly, section 301 tariffs cost American companies roughly $550 million in August. Products subject to the Section 301 remedies faced $594 million in tariffs in August, compared to just $46 million in August 2017. The large increase in tariffs came despite a less than 1 percent increase in the value of imports. Keep in mind: the “List 2” tariffs did not take effect until August 23 and another batch of “List 3” tariffs will take effect in September, so tariff costs should rise significantly in future months.

The data was compiled by The Trade Partnership and released by Tariffs Hurt the Heartland. Use the contact information below to obtain more information about the data.