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LABI hopeful about long-term impact of Trump’s tariffs

July 3, 2018
Originally Posted on Greater Baton Rouge Business Report

In the past week, both the U.S. Chamber of Commerce and Bloomberg have spelled out just how much Louisiana stands to lose as a trade war brews under President Donald Trump’s imposed tariffs.

But surprisingly little has been heard from the state’s own business authority: the Louisiana Association of Business and Industry.

The relative silence is uncharacteristic of the influential business lobby, which is often a fierce critic of any policy that threatens the state’s economic vitality.  

Concerning Trump’s tariffs, LABI president and CEO Stephen Waguespack says his organization does have concerns about the short-term impact, but remains hopeful in the president’s long-term goal of creating a better trade environment in the U.S.

“Everyone understands where the president is trying to get: a trade policy more focused on fair trade and reduced tariffs internationally,” Waguespack says. “We want to see how the process plays out.”

Based on the economic growth spurred by the president’s other initiatives, such as regulatory and tax reforms, Waguespack says, Trump deserves some credit. He agrees the country has for years had a “pretty unhealthy trade imbalance” and that getting other countries to play fair is a “good thing to do.”

Waguespack admits there are concerns from LABI members about increased costs of steel and other supplies that Trump has slapped tariffs on, prompting other countries to retaliate with tariffs of their own.

The effects of a full-blown trade war, however, would be much more dire. Some $5.9 billion in Louisiana exports will be at risk, along with more than 550,000 jobs supported by global trade, according to a U.S. Chamber of Commerce report released Monday, attacking Trump’s tariffs and trade policies.

Louisiana’s heavy reliance on trade makes it “a unique microcosm of how the tariff battle will affect America,” Bloomberg reports. A trade war would slow economic output in the state by at least 7% over five years—more than any other state—and one in six jobs tied to international trade would be at risk.

Still, if Trump’s trade policies are successful, Waguespack maintains the state and nation could be better off in the end.

“We have concerns, but we’re hopeful that we can look back a year from now and see fair trade policy,” Waguespack says. “A lot of folks are wanting to see what the end result will look like.”