The pier in Charleston. FreeRangeStock - Chance Agrella
As manufacturers ship goods at a record-breaking pace out of South Carolina, one certainty about a protracted trade war is that consumers could end up feeling the most pain, a state Chamber of Commerce official said during a recent interview.
South Carolina Chamber of Commerce CEO Ted Pitts told Palmetto Business Daily that he has no feeling about how long or drawn out the Trump administration's tariffs and trade conflict might be.
"I personally don't have a feeling," Pitts said. "I think the administration's approach with China, to address the issues, is welcoming. U.S.-based businesses are encouraged by seeing the administration address the China issue. But I don't think anybody at this point can predict how long it's going to be or how drawn out it's going to be. If it's long and drawn out, the consumer can end up being hurt."
Since January, the Trump administration has imposed tariffs on goods such as solar panels and washing machines, and the aluminum and steel used by South Carolina auto manufacturers and their downstream suppliers who employ tens of thousands. The tariffs are on imports of those items from most countries, including the European Union, Canada and Mexico but most especially China.
South Carolina Chamber of Commerce CEO Ted Pitts Photo Courtesy of South Carolina Chamber of Commerce
This past summer, the Trump administration set a 25 percent tariff on hundreds of categories of goods imported into the United States from China.
Just how tariffs currently are impacting South Carolina manufacturers can be measured at the Port of Charleston, which is experiencing a boom in export shipping during what normally is a slow season. That shipping-export boom, which broke records earlier this month, is fueled by retailers' advance shipping of goods they have on hand to get ahead of the tariffs, South Carolina Ports Authority President and CEO James I. Newsome III said during a CNBC interview earlier this week.
The export boom isn't likely to last but no one really knows, Newsome told CNBC.
"We think we'll see that slow season in the February-to-April time frame," Newsome said. "We don't know exactly what that means, because we've never dealt with this before."
For Pitts, what that uncertainty could mean for consumers begins with the tariffs.
"Tariffs are ultimately a tax on the consumer," Pitts said. "A long, drawn-out trade conflict would not be good for consumers."
What also hangs in the balance is the long-time trade imbalance between the U.S. and China, an issue that the Trump administration is trying to address through the tariffs, Pitts said.
"China has long been a bad actor," Pitts said. "China cheats. You hear politicians say that, you hear folks say that, that when it comes to trade, China cheats. Holistically, the state and the business community appreciate the administration's efforts to try to deal with China and the trade situation."
The difficulty is in whether China or the U.S. will blink first, Pitts said.
"When you look at broader tariffs, in a lot of ways, nobody wins," he said. "You end up in trade wars and trade conflicts, but the administration is using them as a tool, as a tool that they have to try to create fair trade, which needs to be addressed."
One possible bright spot on the same uncertain horizon is the newly signed trade deal among the U.S., Canada and Mexico, officially called the U.S.-Mexico-Canada Agreement (USMCA) but that also goes by other names, Pitts said.
"I think you can't talk about this issue without talking about the new USMCA, the new NAFTA, NAFTA 2.0 or whatever folks are calling it," Pitts said. "That agreement is key, and we're pleased that the administration has updated it; it was a 25-year-old agreement. Ultimately, I would be concerned if there weren't a new NAFTA, but with the new NAFTA in place and supply chains, it could create opportunities."