This morning President Trump announced that the U.S. will impose a 25 percent tariff on $50 billion worth of goods from China.
In return, the Chinese have promised retaliation, in the form of taxation measures of the same scale and intensity. What does that mean for Arkansans?
The United States' biggest trading partners are China, Canada and Mexico. Last month, President Trump made headlines when he announced the U.S. will impose tariffs on steel and aluminum imports on Canada, Mexico and countries in the European Union.
In return, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs on nearly $13 billion worth of U.S. goods. Friday, June 15, President Trump announced a similar approach, this time towards China. The country, America's biggest trading partner, has already threatened retaliation.
So what are tariffs, and what could they mean for your wallet here in Arkansas? A tariff is a tax on imports or exports.
"For your average Arkansan, it could mean paying higher prices,” explained Mike Preston, executive director of Arkansas Economic Development Commission.
Three tire-cord manufacturing plants in Arkansas (Tokusen, Bekaert, and Kiswire) rely on imported steel to operate. If they can't get what they need, the companies may have to shut down, putting around 1,500 jobs at-risk.
"That's worst-case scenario,” Preston explained. “We hope to prevent that from happening, by having certain carve-outs for industries like that."
Those companies' efforts to be excluded from the tariffs have so far been unsuccessful.
Alternatively, Mississippi County is the fourth largest steel-producing county in the nation. Tariffs on steel exported from Arkansas could also affect those companies.
Another industry at-risk is Arkansas' greatest export: agriculture goods.
"Other countries have become accustomed to our rice. They like our good-quality rice and our agriculture products. But if all-of-the-sudden additional tariffs are put on it, that gives another country the opportunity to come in, swoop in, and offer it at a lower price,” Preston said, adding most consumers would likely go for the lower cost.
Preston says that could drive up the cost of those same products here in Arkansas.
"A lot of people have a lot of money laid out there, hoping to get a high enough price for their crops at the end of the year, when we harvest, to cover everything and try to do it again next year,” said Arkansas Rice Federation President, Jeff Rutledge.
In his experience, he said, it's not the consumers, but the farmers that take the hit.
"We are a price-taker and not a price-maker. We take whatever we can get, the best price we can get in that crop year. So, if prices drop like they have this past week, all we can do is wait to sell, and hope the price goes back up enough to cover our costs that we've already gotten into the crop,” Rutledge explained, adding, the result could mean layoffs on Arkansas farms, and less money pumped into the economy by the farmers.
What can you do if you're concerned about the outcome for Arkansans?
Both men say call your congressman and senator. Encourage them to speak on your behalf in Washington.