Chamber Business News

Arizona exports threatened by second and possible third wave of Trump tariffs

Another round of tariffs on Chinese goods and immediate retaliation will likely slow economic gains in America and push the world closer to an economic reckoning, federal analysts warn.

President Donald Trump’s administration slapped a second round of tariffs on $16 billion of Chinese goods last week, adding to an earlier round on $34 billion in goods. A potentially devastating third round on $200 billion in goods at 25 percent appears possible.

With the latest volley, businesses in Arizona now face a threat to $296.1 million in exports from retaliatory tariffs from China, Canada, Mexico and the European Union, according to a new analysis by the United States Chamber of Commerce. A total 772,800 jobs in the state are supported by trade, the report shows.

“Obviously, the bottom line for us is tariffs don’t work. Trade works,” said Kristopher Denzel, senior director of international policy for the chamber in Washington D.C.  that represents 3 million businesses nationwide. “We feel this approach from the administration is going to damage our economy.”

Most economists agree. A few days before the latest tariffs were enacted, a National Association for Business Economics survey showed that more than 90 percent of economists believe current and threatened tariffs will harm the economy.

Minutes released by Federal Reserve officials last week also state that continued tariff wars could be adverse for business and investment and reduce the purchasing power of U.S. households.

Almost 200 individuals testified during the two rounds of federal hearings on new tariffs. Pleas from companies to pull their products off tariff lists were largely ignored.

Trump’s goal is to force other countries to lower tariffs on American goods. He also wants to punish China for theft of intellectual property and unfair trade practices.

Instead of lowering tariffs, however, trading partners have retaliated in kind with billions of dollars in new taxes on American-made products.

“Tariffs are taxes on agriculture producers, consumers, businesses, technology, you name it,” Denzel said. “I think the question we have to ask, is ‘Where is this going?’ and “What is the strategy?”

Companies here and across the country are starting to feel the pinch from the first round of Chinese tariffs on steel and aluminum. Reports of layoffs, delays in purchasing, and higher costs for materials are beginning to surface.

An analysis by the U.S. Chamber shows the Arizona export products affected by recent retaliatory tariffs from trading partners include:

  • Mexico: apples, food preparations, fans
  • Canada: retail surface and active soaps and related products, herbicides, anti-sprout products, and insecticides
  • China: cotton, copper waste and scrap, and aluminum waste and scrap
  • European Union: articles of iron and steel, nuts of iron and steel, containers for compressed or liquefied gas

Victoria Harker

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