2018 Venture Capitol - August 23

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South Dakota Chamber Of Commerce - Venture Capitol
August 23, 2018

Tariffs Felt in South Dakota


Tariffs have been getting a great deal of attention in national news and in South Dakota news as they pertain to agricultural products which have been highlighted by soybeans and markets in China and Europe.  The impact on South Dakota manufacturing has not been as prominent but turns out to be significant.

There are approximately 100 manufacturing firms that are members of the South Dakota Chamber of Commerce and Industry.  About half of the Chamber’s board is made up of executives from these firms.  After hearing from several manufacturing members, the Chamber asked all manufacturing members if their businesses had felt an impact from the tariffs.

The results showed a definite impact and a high level of concern.  Twenty-two of the manufacturers answered the three question survey.  More than 80% - or 18 of the 22 responses – told the Chamber that their business has been affected by tariffs.

Click here for answers to the question:  At this point, has your business been affected by tariffs?

When asked to provide more details about how the tariffs had impacted their business, all 22 said they have experienced increased prices of materials and other inputs.  Six reported that other countries had placed tariffs on their products and ten said they were caught with the increased costs AND contracts with customers that would not allow them to increase prices - including, ironically, the federal government.

Click here for responses to the question: In what way have tariffs hit your business?

When asked if they had taken any action to address how the tariffs were affecting their business, half reported having sent letters to South Dakota's congressional delegation and most had called congressional offices.  Other actions taken by about half of the respondents included signing letters by national groups and conducting meetings with other manufacturers in their community.

Reactions varied.  The survey had a section for comments and nine of the members left very valuable insights about the tariffs.  Four of them noted significant increases in prices of suppliers, particularly steel and aluminum which had price increases before the tariffs took effect, increases that have reached high as 50%. 

There is support for getting better trade deals in the long run and several members expressed a willingness to hang tight while those better agreements are negotiated.  One of the comments made a strong point that if the impact from the tariffs continues, it will have a negative impact on their ability to keep jobs and provide support for community services.

This information was gleaned from 22 manufacturing members of the South Dakota Chamber of Commerce and Industry.  There are over a thousand manufacturers in South Dakota which makes it a reasonable assumption to extrapolate these responses and see that there could be several hundred manufacturers that are being challenged by the tariffs.  With 45,000 people employed by manufacturing in South Dakota, this policy could adversely affect thousands of jobs and tens of thousands of family members across the state.

The Chamber Board of Directors will discuss these tariffs and how to best highlight the impact on South Dakota manufacturers during their next board meeting in September. 

Save the date for this year's Economic Outlook Seminar set for Tuesday, October 30, 2018 at The Country Club of Sioux Falls.  Sponsored by Avera Health, First PREMIER Bank/PREMIER Bankcard, Sanford Health and NorthWestern Energy.


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