Economist: Higher Tariffs Create More Uncertainty

Posted: Updated:
Kyle Anderson is an economist at IUPUI. Kyle Anderson is an economist at IUPUI.

An economist at the Kelley School of Business at IUPUI says the decision to raise tariffs on goods from China will create more uncertainty for businesses and consumers in Indiana and nationwide. The move, which went into effect overnight, is an increase of trade tension between the two countries. Kyle Anderson says it is part of an effort by the Trump administration to open up China to more goods from the United States, since the U.S. imports more Chinese goods than the other way around.

In an interview with Inside INdiana Business, Anderson said there are a number of effects the decision by the Trump administration will have.

"There are the effects on, for example, raw materials. One of the impacts of this has been to cause steel and aluminum prices to be higher and that impacts manufacturers in Indiana, just their ability to compete as goods get more expensive," said Anderson. "Another impact you might have is on exported goods. Along with this, there are certain to be retaliatory tariffs from China so to the extent that we export from Indiana to China directly, those goods will likely have an impact in terms of higher prices and lesser demand there."

Anderson says, for businesses, there isn't much that can be done about the situation. He says companies could begin looking at different ways to source their goods or the materials they need to produce their goods, but that is a difficult process.

"These supply chains are complex," said Anderson. "There's a lot of cost associated with changing the supply chain, so these are not shifts that can just happen overnight even as prices change and it can really squeeze margins for the companies."

Anderson adds the agriculture sector could also continue to see a major impact, especially if there is an increase in retaliatory tariffs.

Earlier this week, Purdue University announced the Purdue/CME Group Ag Economy Barometer fell 18 points in April, marking the fourth largest one-month drop since data collection began in 2015. The barometer measures agriculture producer sentiment and is based on a monthly survey of 400 ag producers throughout the country.

James Mintert, director of Purdue's Center for Commercial Agriculture and principal investigator for the barometer, says, "Farmers are becoming increasingly anxious over their future financial performance. Producers have taken stock of their financial position and prospects for 2019 as they head into planting season and are concerned about the uncertainty arising from the on-going trade disputes with key ag trading partners."

In the April survey, only 28 percent of respondents said they believed the ongoing soybean trade dispute with China would be resolved before July 1.

Anderson says there are a number of effects the decision by the Trump administration will have.
  • Perspectives

    • Mitigating Your Company’s Cybersecurity Risk

      Frequently, I encounter people who think that a software developer understands all languages and can “fix” anything tech related. While that may be true for a few, areas of expertise within tech evolve as rapidly as the technology itself. For instance, there was a time (not long ago) when operating in the cloud was revolutionary. Today, it is considered best practices for some or all of an organization to function within a cloud. Managed information technology began with...



Company Name:
Confirm Email:
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections


  • Most Popular Stories

    • (photo courtesy Dax Norton)

      Whitestown Tops Indiana's Fastest-Growing Communities

      The Indiana Business Research Center at the Indiana University Kelley School of Business says Whitestown in Boone County is Indiana's fastest-growing community for the eighth consecutive year. The center says the town's population nearly tripled, from 3,132 in 2010 to 8,627 last year. Westfield in Hamilton County is not far behind. Its population grew 5.2 percent in 2018, according to information reported by the U.S. Census Bureau. Other communities on the list include...

    • The Waterside project aims to transform 100-acres of the former GM Stamping Plant site. (photo courtesy of Ambrose Property Group)

      Ambrose, Glick Partner on Waterside

      Indianapolis-based Ambrose Property Group has announced a key partnership for the redevelopment of the former GM Stamping Plant in downtown Indianapolis. The commercial real estate firm is teaming up with the Gene B. Glick Co. to build and manage apartments as part of the $1.4 billion mixed-use redevelopment project. Ambrose says the partnership is also part of plans to catalyze "philanthropic and community-centric strategies to strengthen Indianapolis." The firm also...

    • (photo courtesy of the town of Plainfield)

      Plainfield Breaks Ground on Parking Structure

      The first piece of a redevelopment plan for downtown Plainfield is underway. City and community leaders have broken ground on the new Downtown Plainfield Parking Structure, which is expected to be complete in the late summer or early fall of 2020.

    • Despite Profit Increase, Shoe Carnival Predicts Store Closings

      Evansville-based Shoe Carnival Inc. (Nasdaq: SCVL) is reporting fiscal first quarter net income of $13 million, up from $8.2 million during the same period last year. Despite the increase, the company says it expects to close up to 25 stores throughout the fiscal year while adding three new locations.

    • Carmel Ranked Among Best Places to Live

      Carmel has been chosen as the 3rd best place to live in the U.S. according to MONEY.  The publication only looked at cities with a population of 50,000 or greater, and eliminated any place that had more than double the national crime rate, less than 85-percent of the state's median household income, or lack of ethnic diversity.  MONEY was able to pare the list down to 50 communities after delving into data concerning economic health, public education, cost of...