I’m hoping this is just the beginning of a giant pissing match. That it’s just step one in our president’s self-proclaimed “artful” deal-making process.
And, ultimately, the incendiary rhetoric will turn into meaningful renegotiation.
It’s not time to hyperventilate just yet, but keep the brown paper bag close by, Alabamians.
If the trade war our president is threatening actually comes to fruition, it could have devastating effects on our state and the nation’s economy, a sentiment our governor expressed this week.
Breathe in, breathe out.
On Monday, Gov. Kay Ivey, who has been a staunch Trump supporter and even used his tacit endorsement in her campaign ads, voiced opposition to this potential “trade war” by releasing the following statement.
“Alabama has a rich history as a leader in manufacturing, a legacy which continues, in large part, through our five automotive original equipment manufacturers and our over 200 supporting suppliers that have helped establish ‘Made in Alabama’ as an internationally respected brand. Last year proved to be a banner year for auto industry growth in Alabama, with nearly $3 billion in automotive-related investments. Before the recent announcement of a new Mazda-Toyota plant, and other automotive-related growth, more than 57,000 Alabamians were already employed by our auto manufacturing sector, a number which is expected to increase. However, this growth could be stymied if tariffs are imposed on the goods we export around the world,” Ivey said in a press release.
She went on to say we had reached a record high of $21.7 billion in exports, with our auto industry accounting for half of those exports. Our largest importers of those goods were Canada, China, Germany, Mexico and Japan — all countries which may retaliate in response.
“Import tariffs, and any retaliatory tariffs on American-made goods, will harm Alabama, the companies that have invested billions of dollars in our state and the thousands of households which are dependent upon those companies for a good-paying job. I strongly oppose any efforts that may harm those companies that employ thousands of Alabamians and contribute billions to our economy. I am committed to protecting Alabama jobs and consumers, the world over, who are proud to purchase products made in Alabama,” Ivey said.
Obviously, this is something we all need to be concerned about since it could affect our state economy and, in turn, our individual pocketbooks so drastically.
But it will also be very interesting to see how this plays out politically. Trump may find himself between steel country and many other harder places. Because, just like Alabama, there are so many other die-hard, Trump-lovin’ red Southern states that have wooed and welcomed foreign companies, especially in the auto industry.
So how will Trump appease the steelworkers in Pittsburgh while also not crippling the industries that have resuscitated the economies of the very states that offered him such undying support?
Ivey isn’t alone in her criticism of the potential effects of this trade war. And this criticism goes across party lines.
Democratic Sen. Doug Jones has said, “This proposal is going to hurt Alabama, plain and simple.” And Republican Sen. Richard Shelby said, “Trade is obviously a two-way street, and we should encourage fair trade between all countries. However, trade is also a double-edged sword if you impose too many tariffs. I believe that rather than imposing more tariffs, we should go back to the drawing board to renegotiate our trade agreements to make them fair and equitable to the American worker.”
Obviously, the (mostly) Republican leaders of these states will have to go to bat for the companies — foreign or otherwise — employing their constituents and fueling the solid economies they are touting at every campaign stop or town hall meeting, just like Gov. Ivey and our members of Congress have.
But we all know how our president reacts when he feels someone isn’t being loyal. Will he “Sanford” them during this election cycle or the next time they are up for re-election — or will he understand they have no choice? It’s really unfortunate they have to factor that into their decision-making processes. But it will be interesting to watch.
The auto industry is not the only one that would be affected in Alabama. China has threatened to impose retaliatory tariffs on soybeans, one of our top agricultural commodities.
Craft breweries, an emerging industry in the state, fear their costs of aluminum for canning and the ingredients they need to brew their tasty suds will go up.
And every local newspaper in the country and in the state of Alabama — including this one —is already experiencing the effects of this, as our printers have faced a 30 percent markup on newsprint from Canada, which is where most of it is now produced.
In January, Trump’s Commerce Department imposed “temporary” import duties of up to 10 percent on Canadian paper. Two months later, it added anti-dumping duties of 22.16 percent. Print bills are one of the largest expenses for any newspaper and a hike like this, if it remains in place, could have devastating effects on papers throughout the state and country.
Maybe folks in red states wouldn’t care if this put the “failing New York Times” out of business (which isn’t going to happen), but how would they feel if the small-town, local papers that have covered their communities for decades stopped publishing — the papers that have published their wedding announcements and obituaries and photos of their Little League all-stars? The papers that will be absolutely affected the most?
Sen. Doug Jones and Rep. Bradley Byrne have already written letters to Commerce Secretary Wilbur Ross on behalf of the state’s newspapers. Sen. Jones has even co-sponsored a bill on it. Sen. Shelby has voiced support, but also concern over the fairness of carving out an exception for one industry but not others.
Our situation is a little bit different, because there is just one paper mill in the Pacific Northwest calling for these import and anti-dumping duties, which could save 300 jobs there but cost thousands more across the country. It makes no sense.
But I still agree with Sen. Shelby in principle — if we start making exceptions, where do we stop? The real solution here is not to get into a trade war.
Last week, Gary Cohn, Trump’s former top economic adviser, said a tariff war would most likely result in an economic slowdown. A robust economy is one of Trump’s biggest accomplishments and the reason a lot of more traditional Republicans hold their noses and tolerate his Twitter rants and other shenanigans. Will he really want to pour water all over an economy that’s on fire?
I don’t buy it. I think (or rather I hope and pray every night) this is just political gamesmanship. There is no doubt we need better deals with some of our trading partners, but this calls for renegotiation, not an all-out war. No need to throw the baby out with the bathwater.
I hope Gov. Ivey, Sens. Shelby and Jones and Rep. Byrne and others will continue to convey to our president and his economic team that while we appreciate his tough-guy posture on this, none of us — from the Alabama soybean farmer to the craft beer brewer to the auto exec to the local newspaper publisher — wants to see the industries that have always made and continue to “make Alabama great” become casualties of an avoidable war.