An escalating trade war with Canada, China and the European Union (EU) would be most devastating to six states, including major natural gas and oil producers Texas and Pennsylvania, according to a new analysis by the U.S. Chamber of Commerce.
Meanwhile, President Trump said in a weekend interview that while he is open to signing a renegotiated North American Free Trade Agreement (NAFTA) with Canada and Mexico, he wouldn't do so until after midterm elections in November. He also hinted that he might enact additional tariffs on Mexico, which on Sunday elected left-leaning Andrés Manuel López Obrador, who is to take office in December.
On Monday, the Chamber released a state-by-state analysis of the impacts of retaliatory tariffs enacted by Canada, China and the EU. The Trump administration imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports in late May. The same tariffs have been in effect on Chinese imports since May 1.
"Tariffs are beginning to take a toll on American businesses, workers, farmers and consumers as overseas markets close to American-made products and prices increase here at home," said Chamber CEO Thomas Donohue. "Tariffs are simply taxes that raise prices for everyone. Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth."
According to the Chamber, $3.9 billion in exports from Texas were at risk, including iron and steel casing for oil and gas drilling to Canada, sorghum to China, iron and steel parts to the EU and pork products to Mexico.
The Chamber also cited $1.7 billion in exports from Pennsylvania, including coffee to Canada, aluminum waste and scrap to China, motorcycles to the EU and flat-rolled alloy steel to Mexico. Alabama, Michigan, South Carolina and Wisconsin were also identified as being hit hardest by the retaliatory measures. All six states went to Trump in the 2016 presidential election.
"The administration is threatening to undermine the economic progress it worked so hard to achieve," Donohue said. "We should seek free and fair trade, but this is just not the way to do it. It's time to reverse course and adopt smarter, more effective approaches for addressing trade concerns with commercial partners."
In an interview Sunday on Fox Business Network, Trump told Maria Bartiromo that he would wait to sign any renegotiated NAFTA with Canada and Mexico after the midterm elections in November.
"NAFTA, I could sign it tomorrow but I'm not happy with it," Trump said. "I want to make it more fair, OK? I want to wait until after the election."
Trump then appeared to segue to Sunday's presidential election in Mexico, and he issued a veiled threat at enacting more punitive tariffs on the country.
"You're going to have an election," Trump said. "It's going to be very interesting. I have a feeling [López Obrador] is going to be fine. And the reason is because, if they're not fine, I'm going to tax their cars coming into America, and that's the big one. You know, the cars are the big one. We can talk steel, we talk everything. The big thing is the cars."
Later in the interview, Trump called the EU "possibly as bad as China, just smaller...It's terrible what they did to us. EU -- take a look at the car situation. They send a Mercedes in; we can't send our cars in. Look what they do to our farmers. They don't want our farm products. Now in all fairness they have their farmers. So they want to protect their farmers. But we don't protect ours and they protect theirs."