Local response to Trump tariffs mixed

Eric Burlison: Tariffs are a tool to achieve better long-term outcomes.

David Mitchell is concerned about tariff impacts.

Grant Miller: Construction will have immediate frenzy of activity to beat tariffs.

• 
• 
• 

On Wednesday afternoon, just after the close of the U.S. stock market, President Donald Trump stood in the White House Rose Garden to announce sweeping tariffs on imports.

On Thursday, the market responded with its steepest plummet since 2020 – a 1,679-point drop, or 4%, in the Dow Jones Industrial Average, a 4.8% drop in the S&P 500 and a 6% drop in the Nasdaq composite. A loss of roughly $3 trillion in market value of U.S. stocks was reported in today’s Wall Street Journal.

JPMorgan raised its U.S. and global recession odds to 60% from 40% as retaliatory tariffs began to roll in from nations targeted by Trump’s “Liberation Day” announcement. China, the nation’s third-largest trading partner after Mexico and Canada, imposed a 34% tariff on all goods imported from the U.S., matching Trump’s announced increase that brought total U.S. tariffs against China to 54%, according to CNBC.

In 2024, U.S. customers bought $438.9 billion in Chinese goods, according to U.S. Census Bureau figures.

U.S. Rep. Eric Burlison, R-Missouri, characterizes himself as a small-government conservative who takes a dim view of tariffs, but he believes Trump’s tariffs will prove to be beneficial in the long run.

“I’m not going to shy away from the fact that I think taxes and tariffs are not a good thing, but to me, he’s using it as a tool to achieve a better outcome,” Burlison said in a phone interview yesterday.

Burlison, a Springfieldian who represents the state’s 7th District, said the U.S. has changed.

“We’re no longer a nation that’s producing – we’re not a net productive nation; we’re purchasing more from other countries than we’re selling back to them,” he said. “We can’t sustain that, economically.”

Trump’s trade policy move is a historic one, Burlison said.

“While this may be painful in some aspects, we are facing an existential crisis when it comes to our trade and when it comes to our debt,” he said. “We have to make very bold moves.”

Economist David Mitchell does not share Burlison’s optimism.

“I don’t expect good things from it,” he said yesterday of the tariff imposition.

Mitchell, director of the Bureau of Economic Research and the Center for Economic Education at Missouri State University, noted the last time the nation similarly enacted broad tariffs – the 1930 Smoot-Hawley Tariff Act, which boosted import tariffs by 20% – the world was much less interconnected.

That move led to an international trade war and contributed to the Great Depression.

“That’s a huge concern of mine,” Mitchell said. “I could see that kind of issue coming into play again here.”

But Mitchell said he understands the president’s thinking with the move: Trump believes the U.S. is sending good jobs to Mexico, Vietnam, China and other countries because the cost of hiring their workers is so much lower overseas.

“He believes sending jobs overseas is a bad thing, but in the U.S., it just doesn’t make sense for us to make some products,” Mitchell said.

As examples, he cited two disparate products: T-shirts and aircraft. Production of T-shirts does not require a skilled workforce, but aircraft production does – and the U.S. has a large percentage of the world’s supply of skilled labor.

It comes down to the idea of comparative advantage – something Mitchell said an economics student would learn on Day 2 of an introductory class in the subject. Comparative advantage is the ability to produce goods at a lower cost than one’s competition. There is no comparative advantage for the U.S. in manufacturing low-skill goods, Mitchell said.

Mitchell said he was surprised by how big the tariffs are – “leveled on friend and foe alike,” he said.

Trump’s announcement applied a baseline tariff of 10% on nearly all countries beginning April 5, but some countries will face much higher tariffs beginning April 9 – two examples being Cambodia, whose key export is apparel, at 49%, and Vietnam, whose biggest export is computers, electronics and components, at 46%.

But some of the territories hit by tariffs produce nothing at all. Mitchell pointed to tariffs on islands that have no permanent human populations. Subject to the baseline 10% tariffs are the Antarctic Heard Island and the McDonald Islands and the Arctic volcanic island of Jan Mayen.

“Manufacturers are not going to suddenly move to an island in the sub-Antarctic,” Mitchell said. “That’s absurd. It makes it look like you don’t know what you’re doing – like there wasn’t a plan.”

A nation not included in the newly announced tariffs: Russia. White House officials defended the decision to exclude Russia from the tariffs, saying the war in Ukraine has rendered trade between the two countries to zero. The Wall Street Journal notes that country has a running trade surplus with the U.S. of $2.5 billion.

Mitchell said there doesn’t seem to be a lot of logic behind the nations targeted or the tariff amounts assessed.

“It’s like some clerk went to Wikipedia and got a list of every single country and territory in the world, created a list and added a number,” he said. “Some of these things don’t even make sense.”

The tariffs are characterized by Trump as reciprocal, meaning they are in response to tariffs levied by other countries against U.S. goods.

Reshoring factories
Burlison thinks the tariffs will have the effect of bringing manufacturing back to U.S. shores.

“I’ve spoken with multiple manufacturers who manufacture overseas yet headquarter in Springfield, Missouri,” he said. “This is incentivizing them to reshore back to the United States.”

He added that he has presented an idea to Trump and to the House’s Ways and Means Committee chair, Rep. Jason Smith, R-Missouri. His notion is to create an avenue for businesses that want to bring manufacturing back to the U.S. now that they’re facing higher tariffs.

“What I think we should do is offer any company that wants to move their manufacturing into the U.S. a reprieve on the tariffs they would be paying for a period of, say, two years,” he said.

Then, if those companies don’t reshore their manufacturing here within two years, they will be responsible for paying the back tariffs.

“That would give them some financial motivation and wiggle-room to come back,” he said.

He added that he has spoken to business leaders, and the consensus seems to be that two years is a reasonable time frame.

Mitchell has his doubts that manufacturers can immediately decide to open a factory stateside.

“This is not a lemonade stand people are trying to set up. They can’t open this tomorrow,” he said. “It can take years to start a new factory – decades to start new supply chains that are actually going to be relevant, cost-effective and reliable.”

Manufacturers know there’s a chance the tariffs may be abandoned in six months – or reversed in four years, when a new president takes office.

“We might see a lot of people waiting until Trump is out of office on the assumption that the new president comes in and lowers tariffs,” Mitchell said. “I can see people holding off and waiting four years before building a factory to make T-shirts.”

Local impacts uncertain
Asked yesterday to gauge the sentiment of his organization, Grant Miller, president of the Springfield Contractors Association, said it is too early for him to have received specific feedback from members.

“The general feeling in the industry is just uncertainty as to what the impact will be,” said Miller, who is also president of commercial and residential glass installation firm Springfield Class Co. “It certainly will raise construction costs because we do have a lot of raw materials, at least, that are imported. The effect of the cost on the completed building will be just a few percent overall – I think. I hope.”

Asked if the tariffs could have a chilling effect on construction, Miller predicts the immediate impact will be a frenzy of activity.

“The immediate impact is acceleration of ongoing plans, trying to get orders placed quicker to beat the tariffs,” he said.

And the next impact will be delivery delays because of all of the incoming freight from current orders.

“That’s going to affect the ports,” he said.

Responding to the question of whether he favors Trump’s tariffs, Miller said his comment’s do not reflect his position as SCA president.

“I don’t know what the short-term economic impact will be, but I do feel like the long-term economic impact will be good,” he said. “That’s just my personal belief, but I think this will drive long-term fairness in trade.”

He added that there will also be benefits in the short term as the manufacture of some goods will shift quickly to the U.S. as a result of the tariffs.

“I do think there are some things that can be done quicker than we know just by moving the assembly of things that may have been happening just across the border,” he said. “They may have moved to Mexico recently. Maybe they can move back.”

Springfield Glass is currently undergoing a large expansion of its own, and Miller said he doesn’t believe the tariffs will affect its progress.

“I’m feeling OK,” he said. “We got started early enough. I don’t expect tariff-related cost increases on my project.”

Miller acknowledged this is a time of uncertainty – a condition business leaders do not relish.

“The important thing with this time of uncertainty is the same as any time of uncertainty,” he said. “Be calm and make educated decisions best you can, and don’t make emotional decisions.”

Miller said it’s a time to seek out facts instead of feelings.

“I think a lot of times the impacts of these things aren’t as bad as we were afraid they were going to be,” he said. “We use our ingenuity to find ways to manage them and reduce the impact.”

Burlison encouraged business leaders to reach out.

“My office is open. I love hearing input on what I can do to help,” he said. “This is top of mind for me, making sure we keep a productive and thriving manufacturing base.”

A global trade war may paint a different picture for the health of the region, Mitchell said, noting southwest Missouri has traditionally been more insulated from economic highs and lows.

“For the most part, I think all bets are off,” he said.