Gov. Scott Walker and the state’s business lobby — in a rare break with Republican President Donald Trump — are coming out against Trump’s planned tariffs on steel and aluminum imports, saying they could harm Wisconsin companies, outsource U.S. jobs and spark a global trade war with far-reaching consequences.
Walker on Friday joined the backlash against Trump’s plan to impose tariffs of 25 percent on steel imports and 10 percent on aluminum.
Walker’s office said the tariffs could affect “multiple sectors and industries” in Wisconsin, including MillerCoors, Harley-Davidson, Neenah-based packaging manufacturer Bemis and Seneca Foods, a food processor and distributor with nine plants in the state.
Trump’s plan could have the unintended effect of encouraging manufacturers to move their operations out of the U.S. to avoid the tariffs, Walker said.
UW-Madison economist Steven Deller said Trump’s plan could dampen the U.S. construction market and increase consumer costs, especially for cars and home appliances.
European leaders respond in kind
The World Trade Organization warned Friday that Trump risks an economically damaging trade war if he goes ahead with the tariffs.
European leaders quickly assembled a list of U.S. products on which to apply tariffs if Trump follows through.
“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans — Levis,” European Commission President Jean-Claude Juncker told German television, according to Reuters.
Milwaukee-based Harley-Davidson is celebrating its 115th year in business. Most of its motorcycles are sold through independent dealers, about 1,400 in 100 countries.
A Harley-Davidson spokesman declined to comment Friday on the tariff plan, saying the company wants to see more details.
Deller, the UW economist, said if Europe and other U.S. trade partners, chiefly China, respond with retaliatory tariffs or other measures, the odds of a U.S. economic recession in the near term could increase dramatically.
“This kind of ‘policy-by-tweet’ just creates a tremendous amount of uncertainty in the business community,” Deller said.
‘Exact opposite outcome’ seen
Walker said American companies that will feel the negative impact of the tariffs can move their operations to another country, such as Canada, and not face new tariffs on the sale of their products.
“This scenario would lead to the exact opposite outcome of the administration’s stated objective, which is to protect American jobs,” he said.
Walker said if Trump’s goal is to protect jobs, he should reconsider the tariffs, especially on ultra-thin aluminum.
The state’s politically influential business group Wisconsin Manufacturers & Commerce also weighed in against the tariff proposal Friday.
“WMC understands and appreciates President Trump’s desire to protect U.S. industries from unfair trade practices,” said CEO Kurt Bauer. “However, these tariffs on steel and aluminum will result in unintended consequences and retaliation that will negatively impact other U.S. and Wisconsin-made products.”
Walker’s stance shows Wisconsin Republicans increasingly at odds with Trump on the issue. U.S. Sen. Ron Johnson, R-Oshkosh, who co-founded a manufacturing company, issued a statement Thursday opposing the tariffs.
The office of U.S. Sen. Tammy Baldwin, D-Madison, did not comment on the tariffs in response to Wisconsin State Journal inquiries Thursday and Friday. One of Baldwin’s potential Republican opponents in the November election, state Sen. Leah Vukmir, also did not respond. A spokesman for the other GOP candidate, businessman Kevin Nicholson, responded but did not explicitly say if Nicholson supports the president’s plan.
State Journal reporter Matthew DeFour and The Associated Press contributed to this report.