Ohio exported $37 billion in goods to Canada, Mexico, China and the European Union in 2017. Just 9 percent, or $3.3 billion, of those products are affected by the tariffs imposed by President Trump. So if there are stories of hardship, especially among the state's soybean farmers, the overall impact of the president's action has been far from pronounced, neither helping nor hurting.
More, any early drag from the tariffs has been countered through the stimulus of the tax cuts enacted a year ago. These are the findings of a report, released last week, by Ned Hill and Fran Stewart, two scholars from the John Glenn College of Public Affairs at Ohio State and the Ohio Manufacturing Institute.
Sigh with relief? Not exactly.
The report carries a key qualification, or warning: If the tariffs persist, or the president adds to the levies, Ohioans would face higher prices for consumer goods, the loss of international markets and increased costs for parts in the manufacturing process. Taken together, those elements risk a slowing economy here and elsewhere, even, possibly, a broader recession.
These are not idle concerns. Though the president has backed away recently from increasing the current tariffs on Chinese goods as part of advancing negotiation of a trade agreement, the threat remains. The president also is weighing whether to apply new tariffs on imported cars, trucks and auto parts, a step opposed by American automakers. He argues he would do so to protect national security. The claim is hollow, and made worse by the almost certain damage that would come to an industry crucial to the state.
The report notes mounting worries. Data collected by the Federal Reserve system show an acceleration of negative responses about tariffs and trade in the final quarter of last year. A survey of Ohio manufacturers, completed in January, found two-thirds citing tariffs as an area of concern, compared to 4 percent at the start of 2018, the negative effects far outpacing the positive.
There also is wider confusion. The report highlights that Ohioans recognize the largest question involving trade is how best to deal with China, its theft of intellectual property, forced transfers of technology and other barriers to its market. Thus, Ohioans struggle to see why the president "has gone to the mat" with the country's closest trading partners and allies, Canada, Mexico and the European Union, imposing tariffs on their steel and aluminum products.
Ohioans logically wonder why it wouldn't be better to band with allies and partners to put pressure on China to change its ways.
One of the most helpful aspects of the report is the portrait it draws showing the increasing importance of trade to the state economy. It explains, among other things, that the state has the largest exposure to the retaliatory tariffs imposed by Canada.
China is the largest destination for Ohio soybeans. The state is first in the production of motor vehicle engines, a major supplier to Boeing and Airbus assembly operations and a leading center for producing appliances. The state counts 260,000 full-time jobs tied directly or indirectly to trade.
Trade matters to Ohio, and it could matter more if additional small- and medium-sized businesses looked overseas for sales. What the report makes clear is the need to get the strategy right at the top, or the White House.
That correct approach may not be as significant at the start. Yet as tariffs continue, their impact deepens, putting in jeopardy farms and industries, suppliers and jobs. The president has made a splash with his tariff regime. Now the pressure is on to craft agreements before real harm begins to bite.
(c)2019 the Akron Beacon Journal (Akron, Ohio)
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