Tariffs. Could They Impact Jobs in the USA?

The USA seems increasingly split on whether tariffs, recently imposed by the Trump Administration, are a good idea or a terrible one.

The truth is that, once a country places tariffs on items from another country, it becomes a tit-for-tat game, with the other country matching or exceeding the tariffs imposed by the US in retaliation.

President and CEO of the U.S. Tire Manufacturers Association recently stated that they were “deeply disappointed” by the decision of the Trump Administration to impose tariffs and that the importation of high-quality steel was critical to tire production and tire manufacturing jobs.

Tariffs imposed by the government are in their infancy, so their actual impact on jobs have yet to be felt, but the industry is extremely concerned. While some economists say that the short-term pain will be worth the long-term gain, it remains to be seen how these tariffs will play out.

Cooper Tire & Rubber states that there will be price increases since two of their tire products are made at plants in China and therefore, subject to a 10% import tariff, which increases to 20% starting January 1,2019.

A recently revised list of more than 5,700 tariffs included almost every type of pneumatic tire, including used and retread tires, as well as rubber parts, such as hoses and belts, natural and synthetic rubber and polymers. The tire industry is a very competitive market with smaller profit margins than other products, such as electronics and cell phones. Tariffs will most likely lead to higher prices for Americans.

Will higher tire prices affect the job market?

Unfortunately, the answer here is not yet known, but almost everyone in the industry would agree that “it’s possible.” Some tariffs saw an immediate impact, such as the steel duties, which forced Harley-Davidson to move some of its production areas to manufacturing plants in Europe.

There are a few optimistic economists who claim that the current tariff war won’t last long, and that people need to look at the bigger picture, but when it’s your job possibly on the line, it can be hard to see any light at the end of the tunnel.

Could these tariffs eventually mean fewer jobs in the US?

It’s certainly possible, although it is too early to see a definite outcome. While General Motors states that the expected 25% tariff on imported cars will lead to job losses in the thousands, others believe that tariffs will result in more manufacturing jobs being created in the US.

Companies will need to weigh the actual cost between the higher wages and benefits of hiring US workers compared to the price increases which hefty tariffs will bring. We at Tire Talent hold out hope that manufacturing companies will bring jobs back home, but, like everyone else, we are holding our breath as this scenario plays itself out.