Friday, March 2

Steel vs Sorghum - No Worries For Florida?

Let's assume we put huge tariffs on steel from China. It might mean pricier cars, soda cans, and other items that use cheap Chinese steel. Probably the device you're reading this on right now. It will be a true test of Americanism: are we willing to pay more money for the items we use every day? In theory, we might say we are fine with it. When China retaliates with tariffs on sorghum, that also won't seem like a big deal to us in Florida. The problem is that a trade war will affect more than those employed in steel and sorghum.

From the Jaxport website, I learned that it's responsible for $162 billion in trade each year, and it's not just to Europe. The 17 million 12-packs of beer might cost the same to ship, but less of that beer might ship if the cans make it cost more. As the top vehicle handling port in the US, fewer vehicles shipped because of higher prices will affect the port. The port also claims to support 132,000 jobs in the area. Even if you don't work there, the export and import business IS important to Jacksonville, to the tune of $27 billion a year.

We don't produce sorghum at a high rate in Florida, so it's not like tariffs on the grain will negatively impact the agriculture in our state. However, producers of sorghum in the US do export more than sell domestically. States that will get hit by higher tariffs include Kansas, Texas, Colorado, Nebraska, and South Dakota. Sorghum grows better than other crops across the plains, where lack of rain can be a problem for other crops. Sure, you might just tell the farmers to grow something else, but I assume it's grown for a reason, even if it's just to rotate with wheat (there's a definite overlap in the top 10 states). We don't eat sorghum here, probably because it tastes awful, but they eat it in China. Jaxport claims to import 18,000 50-pound bushels of oysters last year. China is the top exporter of oysters, and ships 10 times more than the second country on the list. Again, this may not matter, as oysters aren't on the current list. Just more to consider.

We don't produce steel in Jacksonville. We probably won't be exporting much American steel if we get ourselves into a trade war. We will be able to export vehicles and machinery, but the US is not equipped to compete with China in the production of cheap metal products. I totally get it that we SHOULD buy well-made American steel in our products. I had a mini trampoline that broke over and over because of cheap springs. Looking back, I would pay more than $60 for a exercise trampoline if it had real American steel, since I've probably spent over $100 replacing the springs (my kids still love the thing).

Coming from a former manufacturing Mecca in Milwaukee, I really want something to work in order to return America to its former glory in global manufacturing. There are probably a lot of people in the Rust Belt who approve of tariffs that hurt Chinese imports. I'm not sure how the folks in the Great Plains feel about it. But it seems to me that people in Jacksonville might need to study the situation closely in order to figure out where we stand.

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