Tariffs are bad for Wisconsin manufacturers and consumers
Wisconsin business and consumers will bear the brunt of an impending trade war with Canada and Mexico.
This week President Donald Trump temporarily backed off plans to implement 25% tariffs on goods and materials coming into the country from Canada and Mexico. Those countries have likewise announced that retaliatory tariffs have been put on hold.
While this is good news for Wisconsin manufacturers, producers and consumers, it is only a temporary reprieve. As long as punitively high tariffs are on the table, there will be a chill on the state’s economy as economic leaders and consumers prepare for the worst. Consumer and business confidence is a major driver of economic success in modern America. Doubts caused by the threats of tariffs undermine the state’s economy.
According to Wisconsin Manufacturers & Commerce, manufacturing is Wisconsin’s top economic sector, representing nearly $72 billion in the state’s economy annually.
Spokesmen for the Wisconsin Economic Development Corporation state: “With total trade of $11.0 billion through September 2024 (representing a trade surplus of $1.6 billion), Canada continues to be Wisconsin’s top trading partner, reflecting highly integrated supply chains within the manufacturing sector as well as strong bilateral trade in machinery, plastics, and paper products, to name a few.”
A shrinking bottom line due to tariffs will mean manufacturers will have to tighten their belts through cutting jobs and passing on costs to consumers in an attempt to remain viable. The National Association of Manufacturers warns of the potential loss of 110,000 jobs in Wisconsin resulting in $10 million in lost wages and an economic impact on the state of $19.5 billion in gross domestic product output from manufacturing in the state.
These are big numbers and these are scary numbers. Leaders on both sides of the political parties need to be paying attention and working toward solutions that maintain economic strengths on both sides of the border.
“We live in a global economy. We do not have the luxury of deciding whether or not we wish to compete. We must compete,” said U.S. Sen. Ron Johnson in a statement about the tariffs, warning of the risk of ceding foreign markets to global competitors.
Tariff’s have their place in the global market, but they should be used like a surgeon’s scalpel rather than a blunt club to ensure a level marketplace between domestic and foreign products. In the modern global market, tariffs serve as a major disruptor akin to dropping a giant boulder into a calm lake. The waves radiating out cause even greater disruption.
'Tariffs are a tax,' Sen. Johnson said in an interview with Newsmax. 'When you tax something, you get less of it, so we'll probably get fewer imports, but then with retaliation, fewer exports. Smoot-Hawley was not particularly successful and helped spark the Depression, so I share the markets' concern.”
Wisconsin residents should contact Rep. Tom Tiffany and Senators Johnson and Tammy Baldwin and urge them to keep existing trade agreements intact and oppose implementing punitive and unnecessarily disruptive tariffs.
