When President Donald Trump unveiled extensive tariffs targeting imports from many of America’s largest trading partners, financial markets reacted swiftly, signaling widespread panic worldwide.
Now, global financial markets continue to plummet, possibly spelling disaster for international relations for years to come. However, closer to home, Milwaukee-area business and labor leaders, elected officials, and economists are worried about these new tariffs’ short-term and long-term ramifications. Ever since 2008, recession hasn’t been a term Americans take lightly, but it’s one whose use is starting to feel all too fitting for the current predicament, as many Milwaukee natives agree.
“It’s almost unanimous concern, and I have not spoken to any business leader that’s celebrating the tariffs,” said Dale Kooyenga, President and CEO of the Metropolitan Milwaukee Association of Commerce, describing the responses he’s heard since the tariffs were announced.
The Immediate Impact of the Tariffs
Kooyenga said the impact is registering immediately for some businesses. One local company he spoke with had placed a large product order, and the tariffs now threaten to derail it. The tariff doesn’t apply to the purchase date but applies when the goods hit the dock in the US.
“And so now that their order was so large and the tariff so large,” Kooyenga noted, “it creates significant cash flow issues in a time when interest rates are high.”
Dan Bukiewicz, president of the Milwaukee Building & Trades Council and mayor of the City of Oak Creek, said the new tariffs will produce a price shock for the local building and trades industry and construction budgets.
“The reaction is not good,” Bukiewicz said. “From the contractors that perform construction work to small business owners that supply everything from safety vests to gloves, hard hats, safety glasses: [the price of] everything’s going up.”
How Can Americans Plan for the Future When the Present Is So Chaotic?
Construction bids are prepared at least six months in advance. However, the tariffs and uncertainty surrounding the Trump administration’s future policies will complicate the process.
“You can’t accurately budget for what it will take to complete a building, a bridge, a library, or a museum,” Bukiewicz explained.
The Trump administration said the tariffs are meant to force industries to relocate supply chains and manufacturing to the US. This sort of relocation, however, will take years. Meanwhile, businesses and workers are left to deal with the tariffs.
“Large and persistent annual US goods trade deficits have led to the hollowing out of our manufacturing base; inhibited our ability to scale advanced domestic manufacturing capacity; undermined critical supply chains; and rendered our defense-industrial base dependent on foreign adversaries,” the White House said in a statement last week. “Large and persistent annual US goods trade deficits are caused in substantial part by a lack of reciprocity in our bilateral trade relationships.”
Negotiations That Come at a Cost
Some business leaders still believe the tariffs are merely a negotiating position to secure better trade deals. However, such a tactic leaves average Americans suffering in the interim.
“[Trump’s] talking about, ‘we’re going to pay some higher prices, we’re going to see higher unemployment,” said Rebecca Neumann, a professor of economics at UW-Milwaukee, whose research focuses on international trade and finance. “We are likely heading toward a recession, all for some long-term gain that I don’t think is well spelled out.”
Indeed, Wisconsin’s manufacturing and building industries depend on production inputs imported from other countries.
The tariffs will increase the cost of these inputs for US firms. “So, this entire concept of imposing tariffs to boost US exports may fail because it will be very costly to produce,” Kishor stated.
American Recession Imminent?
“I think that’s where there needs to be much more nuanced thinking about, how do we improve the types of jobs that people want to have now,” Neumann said. “We’re not going to just bring back heavy manufacturing in the blink of an eye.”
“You don’t have to look far down Main Street USA to see how many vacant storefronts happened after 2008 and the market failures that went on,” Bukiewicz concluded. “Everything is so intertwined; it’s like a spider web: If one strand is broke, it affects the entire web.”
