President Donald Trump said Tuesday that his promised tariffs on steel and aluminum imports – 25% on steel, 10% on aluminum – would be applied in a “very loving way.”
But at least a few states might not be feeling it.
Despite Trump’s adverting the tariffs as a worker protection, many businesses in states that carried him in the election, including manufacturers in the Rust Belt region, rely heavily on steel and aluminum imports, according to a new report from the Brookings Institution. Brookings analyzed how reliant states are on aluminum and steel imports as a share of total state imports.
Louisiana, one of the largest importers, relies on steel and aluminum imports to support its oil and gas industries. Already, Royal Dutch Shell has said a tariff could affect its decision to develop a planned Gulf of Mexico project.
Wisconsin Republican Gov. Scott Walker warned the tariffs could hurt the state’s canning and beer industries.
Ohio has about 11,400 workers directly employed in steel and aluminum production but 410,300 in industries that use steel and aluminum, according to Crain’s Cleveland. States with these kinds of imbalances could experience greater secondhand effects than they do in benefits.
According to the Brookings report, four Rust Belt states – Michigan, Ohio, Indiana and Pennsylvania – receive 20% of the nation’s total steel and aluminum imports, much of it going to Michigan’s automotive and metalworking clusters. Several automotive stocks were down 2% or more after Trump’s initial announcement.
The Rust Belt also relies heavily on NAFTA-enabled trade with Canada and Mexico, which could be jeopardized in a trade war. Nearly 70% of US exports to Canada and Mexico are from the Rust Belt, according to Brookings.
Kentucky and South Carolina, which are also home to auto manufacturing plants, are at risk from the tariffs. It could also have broader employment effects in states like South Carolina, where imports arrive. One in every 11 jobs in South Carolina depends on the state’s four seaports –187,000 jobs, according to a report by CNN Money’s Patrick Gillespie.
The tariffs could also have broader impacts in blue states that ultimately affect one issue the President has sworn to protect: defense. Defense subcontractors in Connecticut that supply to larger defense contractors like Boeing or Lockheed Martin rely heavily on imported steel and aluminum and are at risk of having their raw material costs increase.
A US Department of Commerce investigation determined that in 2017, imports of steel and aluminum goods totaled nearly $48 billion, or about 2 percent of total US imports. Steel imports accounted for about 60% of the $48 billion, at $29 billion. Aluminum imports made up $19 billion.