Under Previous Trump Tariffs, How Did Wisconsin Do?

Total Wisconsin Exports and Imports

Tariffs are front and center following President Donald Trump’s actions on Wednesday April 2. In what was declared ‘Liberation Day’ for the American worker, a sweeping new round of reciprocal tariffs were placed on dozens of countries. How these actions will affect America and its workers remains unknown, much less individual states. These tariffs are, however, reminiscent of actions Trump took in 2018. This year proved to be the high mark of trade for the Badger State, as trade declined for the remainder of the Trump presidency.

The Wisconsin Economic Development Corporation (WEDC) provides insightful trade reports allowing for an analysis of how the state fared under these tariff policies the first time around. Prior to these tariffs, Wisconsin enjoyed healthy increases in trade, in back-to-back years. Trade increased by over 15% from 2016-2017, and by more than 7% from 2017-2018. Canada remained the state’s biggest trading partner, followed by China and Mexico.

Total Wisconsin Imports and Exports of Industrial Machinery

In 2018, following an alarming report from the Department of Commerce regarding America’s production capacity, Trump imposed a 25% tariff on steel and 10% on aluminum imports. Not every country was affected by the new tariffs and, shortly after their implementation, agreements were reached to exclude certain countries. These materials are especially pertinent to the manufacture of industrial goods. Total exports of industrial machinery only fell by $.1 billion. However, Wisconsin imports of industrial machinery fell by $.6 billion from 2018-2019.

Following the tariffs on aluminum and steel, Wisconsin imports of industrial machinery fell by more than $600 million––almost 10%. Overall, exports also declined, but only by about 2 percent. Yet some sectors experienced a drastic decline such as aircraft and aviation equipment which fell by over 24 percent. Interestingly, while trade among Wisconsin’s largest trading partners declined, imports from Germany actually increased from 2018-2019.

Total Exports from Wisconsin to Canada and Mexico

In 2018, Wisconsin exported $22.7 billion worth of products––a slight increase of just 1.8% year-over-year. Of Wisconsin’s top five export products, only two suffered a decline: medical/scientific instruments and plastic products. Industrial machinery, which composes a quarter of all exports from the state, remained strong and grew by over $300 million. Meanwhile, imports continued to increase as well, growing by over 11% from 2017-2018. Time lags persist with government economic actions, meaning the true effect of new policies often cannot be felt until many months or even years after their passage.

And so, the negative effects would show the following year. Wisconsin’s exports for 2019 were $21.7 billion, a 4.6% decline from 2018. The state’s share of exports to Canada fell by nearly 4%, while exports to Mexico (Wisconsin’s second largest trading partner) fell by almost 5%.

Total Wisconsin Imports from China

Imports also took a hit. In 2017, the state imported over $27.7 billion worth of goods––the greatest share coming from China with over $7.1 billion. Chinese imports to Wisconsin increased by over $1 billion in 2018, but declined in 2019 to less than $6.4 billion. Overall, imports fell to $28.4 billion after nearly topping $31 billion the previous year.

Although 2020 is best remembered for COVID-19, it marked the two-year anniversary of Trump’s tariffs. A host of global and domestic events make it difficult to precisely say how imports and exports to Wisconsin were still impacted by tariffs. Nevertheless, the state’s trading numbers were down––exporting $20.5 billion while importing $26.8 billion. Imports from the state’s three largest trading partners, Canada, China, Mexico all fell. In 2021, President Joe Biden and European leaders agreed to lift the tariffs on steel and aluminum. That same year, Wisconsin exports to Germany rose by $150 million.

On paper, trade in Wisconsin seems to have recovered over the last four years. Indeed, the state has experienced record trade volume––exceeding $66 billion each of the last three years. However, the ratio of export-imports has become increasingly imbalanced. In the last three years, imports have been 40-49% higher than exports, a stark contrast from the parity of 2016 when imports exceeded exports by less than 7%. Moreover, record inflation under the Biden administration risks taking some of the trade gains out of context. Are Wisconsinites producing and buying more stuff, or have an increase in prices simply masked any economic deficiencies?