President-elect Donald Trump has been using his time before his second term begins to set things in motion. One item that’s been getting a lot of attention are the trade tariffs he’s willing to impose. Drew Combs is executive director of the North Dakota Trade Office. He says while tariffs are a tool for any President, they are also a dual-edged tool…
“…There's the threat of tariffs that is almost as impactful as the tariffs themselves. So I have a feeling that Donald Trump is actually using the threat to get people to the negotiating table a little bit ahead of time. But we can actually see that that's actually working because he's had quick responses from both Canada and Mexico to be able to address some of these concerns.”
But Combs says while the THREAT may have some effectiveness, the actual implementation of tariffs can carry some negative effects with it…
“…You know, he did similar tariffs, and I think there were some lessons learned there, both good and bad. And you're absolutely right. It will trickle down to the consumer, and it's also a lot of things that people probably don't realize that's going to get impacted, and it's probably going to be all the way across the board on just about everything a person buys, you know, even the gasoline prices are probably actually going to go up.”
Combs says anytime you place a tariff on an item it disrupts the factory-to-consumer cycle. He says that’s very apparent on agricultural products. Combs says one example is the dismantling of the North American Free Trade Agreement – or NAFTA – and the replacement policy the U-S-M-C-A…
“…I think it did iron out some of those issues, and as far as trade imbalance, none of them are going to be perfect. You know, and they're always going to take some tweaks and some renegotiations and that sort of thing, but in my opinion, it was a pretty good document. I mean, I still think there were some issues in it, but there's mechanisms in place to be used to change or to come to the negotiating table on how to make those better.”
Combs says the other risk factor comes with established trade markets. He says North Dakota has spent a lot of time developing trade relationships around the globe. He says the tariffs could drive our customers to other markets in other nations and redeveloping those ties could be difficult.