Tariffs are a blessing and a curse for Indiana
WASHINGTON – No state has more to gain than Indiana from President Trump’s steep new tariffs on steel and aluminum imports.
And no state has more to lose, either. Indiana is the top steel-producing state in the country. It’s also the most manufacturing-intensive state, a leading producer of automobile and truck parts that rely on cheap steel and aluminum.
Those two strengths make Indiana a case study in the contradictory consequences that could flow from Trump’s tariffs of 25% on steel and 10% on aluminum, which he formally announced Thursday.
It’s no wonder, then, that the state’s steel producers applaud Trump’s plan while manufacturers are anxious
about it. And the state’s Republican officials — including Vice President Pence — are stuck in the middle.
“Indiana certainly has more to gain than any other state if this relief is put into effect,” said Scott Paul, president of the Alliance for American Manufacturing, which represents steelmakers. If Trump doesn’t try to stop China and other countries from dumping cheap steel into the U.S. marketplace, Indiana will lose businesses and hemorrhage jobs, Paul said.
Indiana’s manufacturers have a different view. Many of those businesses use steel in their products or sell their goods to other countries that might retaliate if the tariffs spark a broader trade war.
“Since these manufacturing companies are such a large share of income and jobs in Indiana, it is likely that the Indiana economy would suffer from the tariffs even though we do produce aluminum and steel,” said Wally Tyner, an agricultural economics professor at Purdue University.
In a state Trump won by 19 percentage points on an economic populist message, public officials are sharply divided over his policy.
Indiana’s Republicans, who have championed free-trade policies for years, have mostly praised Trump’s effort to stand up for American steelworkers while also pressing the president to take a more tailored approach.
Indiana Gov. Eric Holcomb said he supports changes that punish “those who do not play by the rules.” But he also said he wants “exemptions that protect Indiana’s trading partners.”
On the other side of the political fence, one of Indiana’s House Democrats, Rep. Pete Visclosky, whose northwest Indiana district is home to North America’s largest steel mill, has offered a full-throated endorsement of Trump’s plan. He said it will protect the nation’s steelmaking capabilities and the livelihoods of steelworkers.
Even if there’s not a trade war, the effects of the tariffs — positive and negative — will be greater in Indiana than they are nationally, said Keith Belton, director of the manufacturing policy initiative at the Indiana University School of Public and Environmental Affairs.
“The benefits of tariffs like this accrue to a narrow group of steel producers. The costs are spread out widely across a lot of users of steel,” Belton said. “Indiana has plenty of both.”