President-elect Trump has talked about a 25% tariff on Mexico and Canada. Time to consider how this could have an effect on Wisconsin, a state that voted for Mr. Trump.
Supply: ITA.
Supply: ITA.
Wisconsin imported $1.6bn from Mexico, $0.8bn from Canada in 2023. Whole Wisconsin (items) imports from the world had been $7.8 bn, so a not inconsequential share (virtually a 3rd) comes from these two nations (simply to recall for you, these are the opposite two members of the USMCA free commerce space, previously NAFTA. USMCA was negotiated underneath Mr. Trump’s first time period).
Notice that these figures of imports into Wisconsin are possible understating the precise imports. That’s as a result of the documented vacation spot state may not be the ultimate vacation spot, as a consequence of storage, warehousing, and so on. See this notice.
The president of Mexico has threatened retaliation in opposition to our exports. Presumably Canada would additionally do one thing in response. What does Wisconsin export to Mexico and Canada?
Supply: ITA.
Supply: ITA.
In 2023, Wisconsin exports $0.8bn to Mexico and $1.8bn to Canada, so a complete of $2.6bn. Whole items exports to the world is $6.8bn, so these account for almost 40% of Wisconsin’s whole exports.
As famous earlier, the Midwest is especially commerce delicate, so any commerce warfare was going to harm this area notably exhausting.
When it comes to nationwide impacts, Goldman Sachs (11/26), notes:
We estimate the proposed tariffs would increase the US efficient tariff fee by 8.6pp and core PCE costs by 0.9%.
