Republican Strongholds and Swing States Face Economic Impact of Proposed Tariffs

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ICARO Media Group
Politics
26/10/2024 20h36

### Analysis Reveals GOP Strongholds and Swing States Most Impacted by Proposed Tariffs

A recent study has found that Donald Trump's proposed tariffs could have significant economic repercussions for several Republican strongholds and pivotal swing states. The GOP presidential candidate has suggested imposing tariffs of 60% on Chinese imports and 10% to 20% on imports from other nations, which could severely impact the gross domestic products (GDPs) of states such as Indiana, Kentucky, Tennessee, and Mississippi—all of which consistently vote Republican in presidential elections. Illinois, Wisconsin, and Michigan, the latter two being crucial swing states, are also affected, according to a new report by the Tax Policy Center.

"Tariffs, they do matter," remarked Robert McClelland, a senior fellow at the Urban-Brookings Tax Policy Center and one of the study's authors. "It could definitely affect economies, it could affect them in a variety of ways. And it's not just obvious which states are the most affected."

To determine the potential impacts, researchers assessed the origin of U.S. imports, the existing tariff payments, their destinations after entering the country, and their contribution to each state's economy. The analysis also accounted for the GDP value to minimize discrepancies between state economies. For example, while imports nationally constituted 11% of U.S. GDP in 2023, the figure varies significantly by state—ranging from 2% in South Dakota to 27% in Kentucky. The proportion of imports relative to GDP is generally higher in the Midwest and South.

"I didn't anticipate that Mississippi, Tennessee, Kentucky, Indiana, Michigan would be among the states that ended up with the most imports," McClelland said, expressing his surprise.

The proposed tariffs would significantly raise the cost of imports for these states. For instance, tariff payments could make up over 3% of the GDP in Illinois, Michigan, and Wisconsin; 4% in Indiana, Mississippi, and Tennessee; and nearly 5% in Kentucky. Under current policies, tariff payments account for less than 1% of the GDP in all U.S. states.

"That's a huge increase in tariffs," McClelland emphasized, pointing out the dramatic rise.

While Democratic presidential candidate Kamala Harris has not specified her stance on tariffs beyond advocating for fair trade, the Biden administration has largely maintained the tariffs introduced during Trump's first term, with additional tariffs on Chinese semiconductors and electric vehicles.

The study, however, could not determine if the tariffs would affect consumer goods directly or materials used by businesses for production in each state. Regardless of the type of imports, the economic burden would likely fall on the residents. Consumers might face higher prices in stores, while businesses that rely on imported materials could see increased costs or reduced profits, potentially affecting wages.

"Those are among the major ways one might expect to see tariffs work their way through the economy. Even if the consumer is not directly affected, an employee might be," McClelland concluded.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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