Chesterton Tribune

 

 

Ball State economist predicts Trump tariffs could kill jobs in Indiana

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A trade war brewing as a result of tariffs imposed by President Donald Trump could significantly hurt Indiana’s economy, particularly the steel, aluminum, soybean and corn sectors, Ball State University economist Michael Hicks is reporting.

In his policy statement, “Selected Tariff Effects on Indiana,” Hicks estimates initial job losses in Indiana of roughly 6,000 by the end of 2018, rising to 14,000 in 2019, and declining through 2025 to just under 11,000 jobs. The GDP effect ranges from a loss of $668 million in 2019 to $560 million by 2025.

“Using very conservative estimates of the total employment and price effects, our model suggests small but meaningfully damaging effects to the Indiana economy, which will begin to manifest themselves over the coming weeks,” said Hicks, director of Ball State’s Center for Business and Economic Research. “These estimates suggest these tariff levels are sufficient to reduce employment by 0.4 percent from where it would have been by mid-2019 and reduce GDP by some $670 million, or roughly 0.23 percent by the end of next year. This is relatively large, as it is about 10 percent of all GDP growth expected for 2018-19. This more than erases all the benefits of the Tax Cut and Jobs Act that Congress passed a few months ago.”

Hicks noted that the U.S. is in the early stages of what appears to be a rapid escalation in tariff proposals with effects throughout the world. “These tariffs are more than sufficient to threaten the U.S. economic recovery, which began in summer 2009,” he said. “The full tariff regime threatened by the U.S., the EU, China and Canada are sufficient to move the economy into recession in late 2018 or 2019. Fortunately, given the very rapid adjustments to trade policy, the likelihood of any tariff proposal surviving for more than a few weeks is very low.”

 

Posted 6/29/2018

 

 
 
 
 

 

 

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