The trade war has made its way to the Midwest according to economists, and the most recent regional report reflects this trend.
The monthly, nine-state Mid-America Business Index reports lower overall numbers but remained just above growth neutral.
Creighton economics professor Ernie Goss compiles the report, which includes the Dakotas.
“The national number that came out this morning was not as good as the regional number that we had, but both of them are indicating input prices are rising higher," Goss said Monday. "The supply managers, at least to some degree, indicated some of that can be attributed to tariffs and potential tariffs.”
This comes amid a loss of overall jobs in manufacturing in the nation and region, a top target of Trump administration policy. Goss said this could be a misplaced priority.
“I think it’s false hope to try to say we want to bring back manufacturing jobs," Goss said. "I think some of those we’d like to bring back, but overall, we have a comparative advantage not necessarily in manufacturing, but in some elements of manufacturing, and other areas like agriculture.”
With no letup in sight though, Goss said it’s time to buckle up to this economic reality.
“What we’re going to suffer from is the front-running of the tariffs," Goss said. "In other words, businesses out there began to increase their imports — that’s true in our survey — significantly in the first three months of the year to avoid the tariffs. So, the weaker numbers are forthcoming. The first quarter was fairly weak in the US as well. Unfortunately, growth is going to continue to move lower and potentially into a recession.”
Over half of supply managers report tariffs are pushing prices up as growth continues its downward trend.