Economists: Trump’s tariffs hurt automakers, slow SC growth
COLUMBIA, S.C. (AP) — South Carolina is positioned to keep adding new jobs and increasing wages in 2019, but tariffs backed by President Donald Trump could hamper that growth, two University of South Carolina economists said.
The import taxes backed by the president against China and, to a lesser extent, Mexico create volatility, especially in the automotive market which is the backbone of South Carolina’s manufacturing economy, Doug Woodward and Joseph Von Nessen said in their report presented Tuesday at the university’s annual Economic Outlook Conference.
German automaker BMW and Swedish carmaker Volvo say their South Carolina plants may have to cut jobs or slow growth because of tariffs. And each job at an auto factory creates nearly three more in the state in the supply chain, so Chinese tariffs could cost the state 6,000 jobs, the economists said.
“At the end of the day, a tariff is simply a tax. And in this case, it is a tax that is likely to increase the final sales price of vehicles produced in South Carolina,” Von Nessen said. “This price increase, in turn, can have a negative impact on the demand for these vehicles.”
Just minutes before Woodward and Von Nessen presented their report, Trump tweeted he is a “Tariff Man.”
“When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN,” Trump wrote on Twitter.
South Carolina is already seeing some effects of Trump’s economic policies. Its international exports dropped after three years of general growth, a significant development in a state that has embraced international trade since the BMW plant near Spartanburg opened almost 25 years ago, the economists said.
Depending on what the Trump administration does next, Woodward said South Carolina’s economic future could be darker. But there are signs the president will change his policies toward Mexico and China enough to keep the darkest clouds away.
“It looks like they may be resolved,” Woodward said. “We don’t know this for sure. It’s politics, not economics.”
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