Possible trade war worries businesses


Associated Press

WASHINGTON

If a trade war is coming, the cheesemakers of Wisconsin are standing in the line of fire. So are the farmers of the Great Plains and the distillers of Kentucky. So are the employees of iconic American brands such as Harley-Davidson and Levi Strauss.

The likelihood of a trade conflagration leapt closer to reality this week after the United States imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union. Infuriated, the jilted U.S. allies vowed to retaliate with tariffs of their own. And in a separate dispute, China is poised to penalize $50 billion in U.S. goods – many of them produced by supporters of President Donald Trump in the America’s agricultural heartland.

“They’re going to hit the farmers,” said Bryan Klabunde, a farmer in northwestern Minnesota. “We want things fair for all industries, but we’re going to take the brunt of the punishment if other countries retaliate.”

President Donald Trump, who entered office promising to rip up trade deals and crack down on unfair trading practices, is clashing with trading partners on all sides. To the north, he’s battling Canada; to the south, Mexico; to the east, Europe; across the Pacific Ocean to the west, China and Japan.

“The president seems to be creating trade [and other] disputes with everyone – allies and adversaries alike – and it’s difficult to discern any coherent strategy,” said Rod Hunter, a former National Security Council staffer under President George W. Bush. “The impacts of the disputes have been limited so far, but the economic and political costs will go up as retaliation by trading partners begins in earnest.”

Mexico, for instance, plans to retaliate against the steel and aluminum tariffs by targeting U.S. cheese, among other products.

“It’s our second-largest market,” Jeff Schwager, president of Sartori, a cheese company in Plymouth, Wis., said of Mexico. Retaliatory tariffs “will reduce sales – there’s no question.”

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