Trump trade wars threat to Ky. jobs

Kentucky’s Republican leaders have relentlessly pounded an economic drum this year, pushing through a host of laws they say will boost business, attract companies and produce more and better-paying jobs.

They removed worker protections, enacted tax exemptions, even flat-out gave away money in the drive to make Kentucky business friendly.

But here’s what’s strange: They have remained largely silent as a president of their own party threatens to launch trade wars that can only undercut their efforts by hurting Kentucky’s struggling economy.

If President Donald Trump raises tariffs on foreign steel and aluminum, as he’s threatened, one of the leading possible targets for retaliation is Kentucky bourbon.

This has led to a raft of stories and commentaries locally and nationally with headlines like, “Will Trump kill the bourbon boom?” in the New York Times.

Anyone who has ever watched the private jets parked at Blue Grass Airport during horse sales or traced the growth of bourbon sales abroad knows international trade matters here.

But few probably realize how deep and broad Kentucky’s connections are to the international economy. Consider these facts from the Kentucky Cabinet for Economic Development:

▪  450 international companies from 33 nations operate in our state.

▪  Last year, $29.2 billion in Kentucky goods were sold to 199 countries.

▪  Exports supported 140,352 Kentucky jobs, many in 3,655 small- and medium-sized firms.

▪  United States free-trade agreements accounted for $11.7 billion in exports in 2015, up 52 percent since 2005.

Exports support Kentucky’s rural communities, with sales of soybeans, corn, feed grains, tobacco and livestock accounting for $2.1 billion in sales in 2015, according to the U.S. Department of Agriculture.

Three of our largest trading partners — Canada, Mexico and China — rest squarely in Trump’s sights as he beats a drum for U.S. economic isolation and a very limited vision of self-interest, whether through tariffs or renegotiating the North American Free Trade Agreement with Canada and Mexico.

The Business Roundtable, an organization of leading U.S. CEOs, reported that in 2014 Kentucky exported $7.7 billion worth of goods to Canada (our largest customer), $2.5 billion to Mexico and $2 billion to China.

The roundtable makes a bland, but convincing, case for keeping trade routes as open as possible: “With more than 95 percent of the world’s population and 80 percent of the world’s purchasing power outside the United States, future economic growth and jobs,” depend on expanded trade.

There are subtleties in the trade equation, of course, as the Louisvillle Courier-Journal’s Joe Gerth pointed out in a recent column.

Gov. Matt Bevin decided to invest $15 million of taxpayer money in a private venture to build an aluminum plant in Northeastern Kentucky. If Trump imposes a tariff on foreign aluminum that will be a boon for the plant, its employees and, presumably, state investment in the operation.

However, a retaliatory tariff on bourbon would slam another, longstanding industry, its employees and investors.

It’s equally clear that Trump’s protectionist instincts threaten a broad swath of Kentucky’s economy and tens of thousands of jobs in agriculture, manufacturing and other sectors. Our leaders must speak up for the state’s workers and businesses.

This story was originally published July 15, 2017 at 2:59 PM with the headline "Trump trade wars threat to Ky. jobs."