Alabama and the world marketplace is waiting to see happens next with Donald Trump and tariffs. It’s been a week since his deadline to impose a fifty percent hike on imported steel and Aluminum. Alabama appears to be among those caught in the middle. The state reportedly exported fourteen billion dollars in goods and services to Europe and China last year. Alabama also brought in eight million short tons of foreign steel last year.
“Steve, we begin today with Treasury Secretary Scott Besant,” said CBS “Face The Nation” host Margaret Brennan on June first. “Good morning and thank you for being here this morning. Margaret, there's so much to get to.”
Treasury Secretary Scott Bessent’s message was that Donald Trump’s strategy will lead to a fair marketplace for the United States and more jobs.
“There's going to be capital investment, and the number of jobs is going to be grown around the country, whether it's in Pittsburgh, whether it's in Arkansas, whether it's in Alabama,” he said.
Not everyone agrees with the more manufacturing jobs idea…
“I think what you'll continue to see in Alabama is a reduction overall in manufacturing jobs because we're becoming more efficient,” said Doctor Peter Simonson. He teaches supply chain management at the University of South Alabama. Simonson says there may fewer manufacturing jobs in the state, mainly because the U.S. is getting good at it…
“Much of the job loss that we've had, and this has been statistically proven, is not because of trade, but because we just become so amazingly efficient at making things,” he observed.
In short, Simonson thinks the trend toward automated factories means fewer jobs at less pay…
“So, the long answer to your question is that it will be a mixed bag. And I believe that it will hurt Alabama in the short run, and I think in the long run, also hurt Alabama,” Simonson continued.
APR news has spent a lot of time talking with Simonson as the new Trump administration got to work. Most recently, the U.S Court of International Trade ruled that the many of the Trump Administration’s tariffs were not constitutional and lawful. Simonson summed it up this way.
“The court said no, and he said, Fine, we'll wait until this gets sorted out precisely as he's supposed to in our constitutional system. Go to the Supreme Court, and my best guess is that the Supreme Court will uphold the ruling,” he said.
Simonson’s area of expertise is supplying chain management, and that is where a lot of our questions came from. He says the world marketplace is more complex, so things that read “made in China or Japan” really aren’t.
“There are scores of countries where an iPhones parts are built, and that's what makes the supply chain so fascinating, but also so complex. You think of that switch being built in Japan or built in China. Now those parts are coming from all over the world, and they spend some time in China, and they spend some time in Japan, they probably spend some time in Mexico,” Simonson said.
Our economy today depends heavily upon imported goods and services. The Council on Foreign Relations says the U.S. brings in almost four trillion dollars of goods and services. That makes us the biggest importer in the world. Here in Alabama, Simonson says the automobile industry relays heavily upon what we export, and Trump tariffs may have an impact…
“You know if, if that increase in cost reduces demand, as it probably will, that's going to affect their jobs,” he stated,
Simonson says it’s simple economics. If tariffs make the price of a product go up, the demand for that product will go down…
“If you are a company that depends a lot on foreign parts, you know it can hurt.,” said Branden Kirby, an investigative reporter with FOX 10 out of Mobile, Alabama.
“And this is where the car industry comes into play. And all the auto manufacturing we have these supply chains for these big companies are really complicated and interwoven.”
Kirby reports on investments for FOX10 in Mobile
“They've got hundreds or 1000 parts, and a lot of them come from foreign countries. For the auto parts in the United States, something approaching a third of all the parts that are used in the United States come from Mexico or Canada,” said Kirby.
All these things go into the cost of an automobile. If all the prices on the individual parts of a car go up, Peter Simonson at the University of South Alabama says the price per automobile may go up. But, he optimistically compares the future of trade relations between U.S. and its allies to an old married couple…
“We fight a lot, and we yell at each other, and we get mad at each other, and, you know, we kiss and make up. Our alliances run deep and wide, and they are not brittle and okay,” said Simonson.
