Tariff Damage Isn’t Theoretical

The real-life impact of Trump’s tariffs on Tennessee’s economy

I know I’ve already ranted about tariffs, and I make no promises not to do it again. But today, rather than talk about the policy of tariffs, I want to analyze the real-world impact they will have on our state.

It didn’t surprise anyone that President Trump quickly followed through with his threat to impose tariffs on a wide range of imports. After all, he called tariff “the most beautiful word in the dictionary.” If fully implemented, he is going to face the reckoning that such high taxes will have on his constituents and the American economy. There is no way around it.

Whiplash. Trump has now implemented numerous tariffs on multiple countries’ imports into the U.S., and each time has quickly halted them. There is another looming deadline on a slew of industries coming this Wednesday. These fits and starts don’t engender investor faith in our economy, something that has to really grate on Trump. No matter how desperately he wants tariffs to work, it is an economic certainty that they will impose major short-term pain in the hopes of long-term gain. It’ll be interesting to see if he keeps touching the hot stove, or if he starts to realize that tariffs will harm the very folks that swept him back into the Oval Office whether he likes it or not.

Hungover. The back-and-forth on tariffs has already caused plenty of confusion for companies, including right here in Tennessee. One of the most vocal critics of the tariff push is Brown-Forman, maker of Jack Daniel’s world-famous Tennessee whiskey. Not only do tariffs drive up the company’s production costs, but the ensuing trade war has already caused Canadian liquor stores to remove its product from their shelves. Such maneuvers are yet another byproduct of high tariffs.

Beyond Booze. Many other industries will also face the consequences of tariffs. Farmers for Free Trade recently announced that tariffs could cost Tennessee businesses a total of $8 billion and thousands of jobs a year, not just in the farming sector, but across a variety of industries. One-third of Tennessee’s imports come from the three countries facing the greatest tariffs (China, Mexico, and Canada), meaning they could have an outsized impact here. And Trump’s recently announced 25% tariffs on imported cars and parts will certainly have a ripple effect on auto manufacturers. Yet again, Tennessee will get hit hard, as it is the top Southeastern state for automotive industry jobs.

And it’s not just goods that are impacted. From the Smokies to Beale Street, Tennessee imports lots of tourists who contribute massively to our economy and make up a significant portion of our state’s tax base. One airline has already cancelled flights between Toronto and Nashville as a result of the trade war, and state tourism officials recently warned of the dampening effect that tariffs may have on the industry.

Serenity Now. It’s baffling that proponents of tariffs continue to push for the antiquated policy while expecting the results to be different this time around. You can keep jumping all you want, but gravity won’t suddenly disappear to let you shoot off into space. The laws of economics are just as strong as gravity, and no amount of willpower can overcome the consequences of tariffs and trade wars. If Trump won’t admit it, hopefully our members of Congress will finally do their jobs like the Constitution requires and stop him from unilaterally imposing them.