And that's my reason.
Banner headlines of 25 percent tariffs on Mexico and Canada from President Trump one
day then an about face and they're on pause for 30 days and across the board
additional 10 percent US tariff on China remains in place unsettled times and
fast-moving. What's the reaction in the business community in Wisconsin? For that
we turn to Kurt Bauer president and CEO of Wisconsin Manufacturers and
Commerce and thanks very much for being here. My pleasure. So last weekend when
you heard the news of the 25 percent tariff on Canada and Mexico what was your
reaction? Not a surprise. He campaigned on this. We knew something was coming. We
weren't sure exactly how broad it was going to be. We thought it was a
negotiating tactic particularly with Canada. We thought that there'd be
something more with Mexico. We obviously thought something was going to happen
with China. But it was a little broader than we thought. How relieved were you
then when it was kind of pulled back? I think the pause is good. I'm concerned.
The retaliatory tariffs would be rough on Wisconsin. We are a manufacturing
state. We are a agricultural state. We make things. We process things. We grow
things and we export them around the world. Canada's our number one trading
partner. We have a positive trade with them right now. The second largest is
Mexico and then China. So all three are on the chopping block. They account for
about 50 percent of Wisconsin exports. So this could have a very significant
impact on the state of Wisconsin and our manufacturing agricultural industries.
So it's apparently a 30-day pause. Do you think it will be reenacted? I don't
know. There's a lot of talking across the border. I've talked with my counterparts
in Quebec, Ontario and Alberta. We have very strong relationships among the
trade associations across the border. We're doing everything we can to try and
work something out as best we can. Ultimately this is up to the president.
He does have the authority to do this and we're hoping that we're able to work
out some sort of deal. It looks like Mexico and Canada made some
accommodations. We're seeing that from other countries as well. So hopefully
this will work out and we won't have tariffs and we won't have a trade war.
Yeah if business moves on certainty though, what's this climate like? Well
that's funny you should say that because business is inherently
uncertain and this government shouldn't make it worse. This certainly does. We
saw during COVID-19 that businesses were incredibly resilient. They were
adaptable. They'll have to be again if this goes into place. The concern we
have is supply chain and energy. We get a lot of our energy from Canada,
particularly Alberta. We don't want those flows cut off. That will have a major
impact on the cost of energy in the state of Wisconsin. Supply chains are
difficult as well. You can't just snap your fingers and create a supply chain,
particularly on precise products and raw materials. So you know there are there
we have skin in the game to be sure. What about the additional 10% tariff on
China? Well we've seen a lot of our members moving away from China for a
variety of different reasons. China has not been a good actor on trade. They have
manipulated their currency. They have stolen IP. They've forced tech transfers
in exchange for market access. They subsidize their industries. They have
dumped into the United States to put American competitors out of business. So
86% of my members support tariffing China because they don't believe that
they've been a fair player in trade. Look we're manufacturing state as I said
earlier we're an agricultural state. We want to sell to the world but we want it
to be on a fair and equal basis. So how injurious would it be to Wisconsin if the
Canada and Mexico tariffs or a trade war does happen? Depends on how long it
lasts. Depends on specifically what. But it would certainly have an impact and
would see it right away. It depends on the industry but most businesses, most
sectors would see some effect right away and of course that would trickle
on to consumers as well. In fact I was gonna ask what should consumers brace
for? Well let's hope that we don't have to brace for anything but it's
hard to know. I think gas prices would probably go up. You'd see impact on
products and maybe agricultural products that we bring up from Mexico. I was
thinking of the Super Bowl if you want your guacamole avocados largely come
from Mexico. All of that could be higher prices. Briefly you said you were in
Washington this week. Have you spoken with the Trump administration about this
and your concerns? We had a delegation at the White House this week. We did talk
about it. I was not there. I was at the Pentagon having a different conversation
not about tariffs. We were on the Hill talking to the delegation. They're
concerned about it. They certainly recognize that Wisconsin is a major
manufacturing and agricultural state. They know the stakes. Kurt Bauer thanks
very much. My pleasure.
I'm getting a lot of information. I'm a fast-dogger. Good. Works for us. All right.
Thank you. Good luck with all this though to all of us. Yeah well we'll see what
happens. We are talking to the Trump folks but I mean he's pretty intent on
it. I mean it goes back to again what he wants to accomplish and from our
perspective if he wants more manufacturing the way to do it is business
climate not tariffs. So he already wants to lower the tax rate for manufacturers.
We have a manufacturer's and agricultural production tax credit in
Wisconsin. That incentivizes production and jobs in Wisconsin. Regulations are
ridiculously stifling and suffocating energy, natural resources and then of
course workforce if we can reform our guest worker program. Bottom line is we
control our own destiny on all of the above. Yeah the guest worker program is
a big deal. Yeah we are lobbying hard on that because of course Wisconsin has a
demographic drought. We just don't have enough people. Man there's so many
things for you to focus on. Yeah there are. Well thanks so much for having me.
Thank you. Nice to see you again.
you