Projected effects of China retaliative tariffs on the Wisconsin economy

As an answer to tariffs imposed by Trump administration on imported steel and aluminum products China has imposed their own list of tariffs. It consists of 128 categories of goods. What kind of goods will became obsolete as an export commodity? How the upcoming trade war will affect Wisconsin state? Who will benefit from it? We will try to guess the answers.

Chinese steel and aluminum import to USA is evaluated as $60 billions. Meanwhile, US export to China accounts only for $3 billions. The smaller the base is, the less economy will be affected and thus the prospects to win a trade war. According to this model USA leads 20:1. The game is not over though.

However it should not be treated as sport. The score is not as important as the affected economies. Trade deficit of US towards China amounts $375 billions in 2017. The rise of Wisconsin economy in 2017 is well in accordance with rising export to three trade partners: Canada ($6,892,057,709), Mexico ($3,197,712,437) and China (1,731,830,321). Export to China grew 21% during 2016-2017, while Mexican and Canadian exports have gained only 4,31-4,78%.

128 categories of goods on which Chine imposed retaliatory tariffs (15-25%) are mostly food and fruits and nuts. The exported value of this commodity in Wisconsin accounts for $341,909,192. It is not as big as $5,843,920,781 exported by Wisconsin in industrial Machinery. In fact fruits and nuts are 11th in the list of Wisconsin exports. Main goods exported to China are: aircraft and parts [tariff exempt]; industrial machinery [tariff exempt]; dairy products [partially affected]; wood and wood products [tariff exempt]; and raw hides and skins [tariff exempt].

The trade war in it’s current stage will not affect the Wisconsin as a whole. Of course some companies will suffer as their export potential will fall and trade routes and established partnership disrupted. It will severely affect the export of ginseng and cranberry. However the results will be far from apocalyptic at least for foreseeable future until EU will not impose something similar.


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