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Report links recent tariff shifts to billions in lost Tennessee trade
Summary
The Boyd Center told senators that higher effective tariff rates and trade-policy shifts are linked to a roughly $4.1 billion drop in imports from China and a more than $1.2 billion fall in exports to Canada, with transportation equipment and agricultural sales especially affected.
Dr. Larry Kessler told the Senate Finance, Ways and Means Committee that changes in federal trade policy and tariff announcements have altered trade flows and prices for Tennessee businesses and producers.
"That right there is showing a $4,100,000,000 drop or just over the last year," he said while describing a large fall in imports from China driven by declines in computer and electronic purchases. He added that Tennessee exports to Canada fell "by over $1,200,000,000," largely due to a pullback in transportation equipment purchases.
Kessler said the effective tariff rate has risen substantially since April of last year, with estimates ranging from about 11.2% to 14% depending on method, and that producers have begun to face higher input costs as measured by the producer price index. He warned that continued retaliatory measures and higher input prices could pressure manufacturing and agriculture: "China pretty much just stopped buying export buying agricultural goods from The US as a whole, including Tennessee," he said, describing about a $500 million decline in agricultural exports.
Committee members flagged the risk to motor-vehicle manufacturing and row-crop producers and asked Kessler whether federal policy or market shifts could be offset through state action; Kessler said the impacts are evolving and worth close monitoring.
