Proposed tariffs on steel and aluminum on foreign countries could have an effect on multiple parts of Kentucky’s economy.
President Donald Trump signed an executive order Monday that would impose 25 percent tariffs on steel and aluminum from foreign countries, with no exceptions.
That could have an effect on goods manufactured locally.
Todd Dunn is the President of the United Auto Workers union chapter at Louisville’s Kentucky Truck Plant. He says tariffs could affect the cost of raw materials they used to build their trucks.
“When you look at the Kentucky Truck Plant being over 54% of all North American profits, you start thinking about how that can affect the profitability of Ford Motor Company,” Dunn said. “You start thinking about how that cost is going to be absorbed. Most of the time it's not absorbed. It's going to be passed right on to the consumer.”
Dunn says there’s worry about how that could affect jobs at the plant, and the union is figuring out how to respond in the meantime.
“We’ve got 12,500 people, approximately, working in Louisville, Kentucky. You take a shift off each plant, what would that do? We're not talking about losing a shift right now, but the possibility is there if we don't prepare and plan and make very strong, educated decisions on how tariffs are implemented,” Dunn said.
Tariffs could also have an effect on beer sales.
Katie Marisic is the senior director of federal affairs for the Brewers Association, a national advocacy group for local brewers. She says it could impact their manufacturing process.
“Can sheet is what is used to make the aluminum cans that both consumers and small and independent craft brewers love,” Marisic said. “And it's not just sold to American breweries or American people using cans. Those cans are then exported to other countries as well.”
Marisic says breweries have seen smaller profit margins over the past couple years because of inflation, and tariffs could worsen that situation. She says breweries that have raised prices 6% or more over the last four years were less likely to grow than breweries that kept prices flat.
Sales of exported bourbon, Kentucky’s signature spirit, could also be affected. The European Union could impose retaliatory tariffs on American whiskey exports.
Ken Troske, chair at the University of Kentucky’s Department of Economics, says that would mostly affect overseas markets.
“If we want bourbon to continue to grow, I can't see it continue to grow in the US. It's gonna have to grow overseas,” Troske said. “They seem to have been positioning themselves for that, given the amount of bourbon that's being aged. And so tariffs do not help that, definitely.”
Locally, there are currently 185 aluminum production facilities in Kentucky, and 43 sites that produce steel and iron. The U.S. Geological Survey says “the state has the greatest capacity to produce aluminum in the nation.”
The round of tariffs are expected to take effect March 12.
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