Trump Administration's Tariffs Starting To Trickle Down To Small Communities

Jul 12, 2018
Originally published on July 12, 2018 8:59 pm
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Here in the U.S., those aluminum and steel tariffs that the Trump administration proposed are starting to be felt in Alabama. The state is the third-largest for auto exports. Troy Public Radio's Kyle Gassiott reports state officials are raising concerns about those tariffs, and that could put Alabama at odds with the president.

KYLE GASSIOTT, BYLINE: When President Trump announced his first round of tariffs on Chinese goods, he explained it would level the playing field.

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PRESIDENT DONALD TRUMP: Just use the word reciprocal. If they charge us, we charge them the same thing. That's the way it's got to be. That's not the way it is for many, many years.

GASSIOTT: In Alabama, elected officials like Republican Governor Kay Ivey say tariffs on imports like steel and aluminum could drive up production costs specifically for auto companies that have plants here like Mercedes, Honda and Hyundai. Ivey's been crisscrossing the state, voicing her concerns.

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KAY IVEY: Alabama's economy is driven in large measure by advanced manufacturing in automotive and aerospace firms. And both of those utilize a great deal of steel and aluminum.

GASSIOTT: Ivey said she's also concerned tariffs on exports could threaten the growth of the auto industry which is worth $3 billion in investments and directly employs 40,000 people in Alabama. But these tariffs championed by the president are not easy for a governor in a deeply red state to take a stand against.

GREG CANFIELD: We're not at odds with his ultimate goal.

GASSIOTT: Alabama's Secretary of Commerce Greg Canfield says the governor shares the president's desire to create more trade opportunities for the U.S.

CANFIELD: What we are probably in disagreement with is - while we're raising their level of awareness, we might prefer to see a more measured approach, a more negotiated approach. But that takes longer.

GASSIOTT: Canfield has heard about the tariffs from Alabama's auto companies and other industries, too. In the showroom of Curtiss Motorcycle in Birmingham, owner Matt Chambers fires up one of the bikes which is covered in burnished steel.

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GASSIOTT: Chambers says his highly customized motorcycles have electric engines, which are popular in countries like China. Chambers plans to continue manufacturing in Alabama for now but is worried possible future tariffs on battery-operated motorcycles could change that.

MATT CHAMBERS: That could be a trigger that would require a strong business case for possibly creating the motorcycles that are sold in China to be assembled and manufactured in China.

GASSIOTT: Alabama isn't alone. Other Southern automotive states that voted for Trump such as Tennessee, South Carolina and Georgia are also bracing for higher costs. Canfield, the Alabama commerce secretary, expects automakers will have to raise prices on their vehicles.

CANFIELD: And when consumers start bearing that cost, the demand on those vehicles that are being produced in the state of Alabama might decline and might decline to the point that production cuts become necessary.

GASSIOTT: And, Canfield says, what follows next could be a loss of manufacturing jobs for workers in Alabama's auto plants. For NPR News, I'm Kyle Gassiott in Montgomery. Transcript provided by NPR, Copyright NPR.