Trade war gets local
Tariffs raise concerns among Oklahoma industries
In President Donald Trump’s multinational trade war, an estimated $208 million worth of Oklahoma’s exports are in danger because of retaliatory tariffs.
Exports of meat — pork in particular — iron and steel pipes, and cotton are especially at risk in the state, according to the U.S. Chamber of Commerce. Oklahoma jobs — 401,000 of them — are supported by trade.
“We’re certainly concerned,” said Roy Lee Lindsey, executive director of the Oklahoma Pork Council. “We are an industry that’s growing ... rapidly, not just here in Oklahoma but across the country. And that growth is all predicated on exports.”
Lindsey said pork farmers in May exported 27.5 percent of their product,
so anything that limits export sales is bad for business.
“The administration has told us, the president has said repeatedly that he’s going to take care of our farmers and ranchers,” Lindsey said. “We’re going to believe him, and we’re going to hold him to that. But the longer this goes on, the harder it gets.”
The trade war also affects industries that use imported goods, such as steel, that the U.S. has levied tariffs on.
The oil and gas industry relies on imported steel because there is a lack of availability of certain products needed for drilling, pipeline infrastructure, refineries and petrochemical operations, said Chad Warmington, president of the Oklahoma Oil and Gas Association.
He said the trade war will either slow down development and production or the refining and conversion of natural gas to other petrochemicals, which are then exported.
“It’s going to make it harder for us to one, produce, and then two, export,” Warmington said. “And then on top of that, we have the potential viability of a tariff being levied on the importation of our crude into other countries like China.”
He said that one-fifth of U.S. exports go to China, so it is a “big potential loss of a market.”
“We just hope that the uncertainty doesn’t carry on for too much longer,” Warmington said. “When we’re in a cycle like we are now where there’s a significant uptick in exploration and production, anything that slows that down is not good for Oklahoma. So every well that doesn’t get drilled or any pipeline infrastructure that gets delayed, that might be a loss to Oklahoma for years to come.”
The U.S. Chamber of Commerce released a statement that said escalating “tit-for-tat trade actions” will raise costs for U.S. businesses and consumers.
“Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth,” said Thomas J. Donohue, the U.S. Chamber president and CEO, in a news release. “The administration is threatening to undermine the economic progress it worked so hard to achieve. We should seek free and fair trade, but this is just not the way to do it.”
A U.S. Chamber of Commerce spokesperson did not provide further comment.
Michael Kelsey, executive vice president of the Oklahoma Cattlemen’s Association, said the beef industry has two big concerns about the trade war.
The first is that a tariff on U.S. beef makes it comparatively more expensive in other countries.
“They’ll choose other things,” Kelsey said of foreign consumers.
The second is that pork — which is typically exported more and will have a higher tariff — will flood the market in Oklahoma when much less of it is purchased in other countries, he said. That would cause pork prices to decrease, making it cheaper than beef, which hurts beef sales.
Kelsey said it is hard to predict exactly how this will play out because it is a complex, international market. Lindsey agreed.
“If you’re talking about 60 days, that’s one thing. You start talking about 12 months, that’s a different animal,” Lindsey said. “We’re hopeful that we’ll get this resolved very quickly.”