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Yahoo
05-02-2025
- Business
- Yahoo
Higher prices on cars, food, electronics: How Trump's tariffs could impact Indiana
Following through on a key campaign promise, President Donald Trump began enacting tariffs on a number of foreign goods over the weekend and threatened that more could be on the way in the future. Though the full details, timeline and impacted countries remain in flux, many Hoosiers are bracing for the extra costs that tariffs could bring to industries across the state. Trump's proposed tariffs could heavily impact Indiana's robust automotive industry, as well as food, oil and construction industries, economic experts say. Canada, Mexico and China — the three nations on whose goods Trump threatened to enact tariffs — ranked as the top trade partners for Indiana in 2023, leading many economic and industry experts grappling with the potential impact on consumers and the past weekend Trump announced plans to put tariffs on most goods from Canada, Mexico, and China. Earlier this week tariffs for the first two countries were placed on a 30-day pause after their leaders promised to take steps to curb the flow of fentanyl and undocumented immigrants into the United States. However, on Tuesday at midnight, a 10% tariff on all Chinese goods went into effect, placing extra costs on thousands of goods from toys to electronics and renewing a trade war between the world's two largest economies. Indiana Chamber of Commerce President and CEO Vanessa Green Sinders said the chamber was encouraged by the negotiations between Trump and the country's neighbors but remained cognizant of the strain tariffs could place on Indiana industries. "We urge the President to keep negotiating to reach agreements that are beneficial to Indiana and our nation. We have asked our member companies for feedback on specific areas of concerns and will use that as the basis for any future action we would share with the Trump administration and Indiana's congressional delegation," Sinders told the IndyStar in an emailed statement. Tariffs act as an extra tax on products brought into the United States. The importer typically pays the tax, meaning American businesses could pass down the extra cost to consumers to recoup profit margins, said Andreas Hauskrecht, professor of business economics at the Indiana University Kelley School of Business. If the tariffs on all three countries Trump has already named go into effect, Hauskrecht estimates, American households would spend $180 to $240 more per month. He likened the tariffs to an added sales tax. For instance, the tariffs on Chinese goods could mean higher purchase prices on goods from clothing to Apple products. Indiana consumers could feel the impact sooner rather than later since businesses might decide to preemptively raise prices on foreign products already in the United States, said Purdue University international economics professor David Hummels. As the uncertainty wears on, business leaders face an unsteady economic future, meaning Indiana could see less hiring and less investment in the local economy, Hummels said. "Do I hire more workers? Do I expand my plant operations? Do I put in another order for parts and components? Or do we just kind of wait on all that stuff until I have a lot more certainty on my environment? I think they're in a very difficult position right now," Hummels said. The Indiana Manufacturers Association, representing some 1,100 companies across Indiana, sounded the alarm on the proposed tariffs on Mexican and Canadian goods on Monday. 'However the next few weeks or months develop, Indiana's manufacturing industry and consequently the state's economy will be impacted,' President and CEO of the Indiana Manufacturers Association Andrew Berger said in a statement issued before Trump paused the plan to place tariffs on goods from Canada and Mexico. If Trump follows through with plans to place tariffs on Canadian goods, the automotive industry would also likely take a big hit since even cars manufactured in the United States use parts that are manufactured abroad. Indiana ranks second in the automotive industry among the states, producing more than 1.3 million trucks and cars each year, according to the Northeast Indiana Regional Authority. General Motors maintains a large presence in Northeast Indiana, having invested more than $23 billion in facilities here over the past decade. Tariffs could essentially halt the state's car production in its tracks, Hummels said. But more than commercial vehicles could be affected by tariffs. A spokesperson for Columbus-headquartered Cummins Inc. said the engine manufacturing company was "monitoring actions closely." In a statement, Cummins's spokeswoman Melinda Koski said that the company "supports targeted trade actions and modern trade agreements that address systemic issues, promote U.S. manufacturing, and ensure American businesses remain competitive globally." Nor would the impact be restricted to vehicles. The Midwest also relies heavily on Canadian crude oil to fill gas station pumps, said Patrick De Haan, head of petroleum analysis at GasBuddy, an oil price tracking website. Should Canadian energy products face tariffs in the future, De Haan predicted a slow but modest growth in oil prices. Averting tariffs for now also led leaders in the construction industry to breathe a sigh of relief. About 7% of American construction materials originate in another country, said Rick Wajda, CEO of the Indiana Builders Association. New home constructions often rely on goods such as softwood timber from Canada and gypsum, a key product for cement and drywall, from Mexico. If the Trump administration does decide to institute tariffs, Wajda said he hoped some exceptions could be made to prevent impacts on home buyers. "We certainly understand the bigger picture and the intentional policy goals on trade policy, but we continue to remind them of the effects on the housing industry and hope that they would consider exempting construction materials from potential tariffs to help ease that stress on the housing industry moving forward," Wajda said. But individual consumers won't be the only Americans burdened by the tariffs, Hauskrecht said. The longtime trade economist said China, Canada and Mexico would likely respond to the United States with retaliatory tariffs of their own, directly harming American industries. China retaliated with its own set of levies Tuesday —15% for U.S. coal and 10% for crude oil, farm equipment and cars — alongside a trade curb banning a handful of metals from sale to the United States. The five metals are used in various American defense and energy products. 'It's not only that we hit our consumers between the eyes,' Hauskrecht said. 'Also, our producers will have a reduction in demand and will sell less. It's a lose-lose strategy for everyone involved.' While the automotive and consumer goods industries would likely be hardest hit, tariffs on food could increase restaurants' inventory costs. Last year from January through November, the United States imported $6.4 billion in meat and livestock products from Canada and $10.8 billion in fruit products from Mexico, according to data from the United States Department of Agriculture. Carlos Villagrán, who owns Chao Vietnamese Street Food in Fishers, said his biggest worry isn't meat since he primarily sources from within Indiana. He worries more about tariffs on Chinese and Mexican products like napkins, gloves and the Styrofoam boxes crucial to Chao's take-out operation. Villagrán maintains a spreadsheet to track expenses and estimates that since the COVID-19 pandemic, roughly 30-50% of his restaurant's sales on a given day are to-go orders. He said items like boxes, soup containers, sauce cups and chopsticks cost him a few hundred dollars each week. If the cost of these products — as well as ingredients from Mexico like avocados, peppers, mangoes and spices — reach a certain threshold outlined in his spreadsheet, Villagrán said he will have to compensate by increasing the price of certain menu items. 'The only person that's (ultimately) going to have to pay for (the cost of tariffs) is me,' Villagrán said. 'And I can't pay it myself, so I'm going to have to bring it onto the customers.' Even some experts didn't want to place bets on what happens to Canadian and Mexican goods once the 30-day pause ends or whether Trump will impose other tariffs. Hauskrecht said that from a financial standpoint, the tariffs if imposed would likely wind up costing Americans more. 'It is a very aggressive, transactional negotiation technique,' Hauskrecht said. 'But economically, it makes zero sense. It's just a negotiation technique to convince our partners to follow our advice, to say it friendly.' Alysa Guffey covers growth and development for IndyStar. Contact her at amguffey@ Contact dining reporter Bradley Hohulin at bhohulin@ You can follow him on Twitter/X @BradleyHohulin. This article originally appeared on Indianapolis Star: Higher prices on cars, food, electronics: How tariffs could impact Indiana
Yahoo
30-01-2025
- Business
- Yahoo
Tribune-Star Editorial: Child care bills deserve attention
There is momentum at the Statehouse to address child care affordability and availability. Most of the momentum is fueled by the realization — finally — that child care affects the workforce, therefore it affects the ability for Indiana to compete in a national and global market. 'What we hear from not only our small businesses but our large businesses is the need for workforce. The harder we make it on our workforce to enter the workforce, the worse off our businesses are going to be,' Rep. Kyle Miller, D-Fort Wayne, minority chair of the House Commerce, Small Business and Economic Development Committee, told The Statehouse File. Vanessa Green Sinders, president and CEO of the Indiana Chamber of Commerce, echoed those remarks. 'Indiana, we are such a great state to do business in, and we have so much economic development going on, … but that enthusiasm and that economic development is going to take more workforce,' she said. Research conducted during March 2024 by the Indiana Chamber of Commerce suggests that insufficient child care availability is costing Indiana $4.22 billion in lost economic activity each year. It also found over half of Indiana parents miss work or class due to child-care problems. Child care-friendly legislation has been filed by two Democrats so far this session. House Bill 1430, filed by Rep. Wendy Dant Chesser, D-Jeffersonville, will create the Employee Child Care Assistance Partnership program. And, Senate Bill 115, filed by Sen. Rodney Pol Jr., D-Chesterton, will give workers and caretakers increased access to paid family and medical leave. Both bills have a long way to go to gather support and with a Republican-led supermajority may not have legs to stand on by the end. But they should. Both Democrats and Republicans are affected by the crisis and both support a healthy workforce for this state. Both of these bills deserve consideration and debate, but also movement. The General Assembly is uniquely positioned to play a role in solving the child care crisis. They should get serious in doing so. Affordable and reliable child care also affects families' well-being, the ability to live, work and play in their communities — their quality of life. Don't we want a state that can support families who want to stay here?
Yahoo
29-01-2025
- Business
- Yahoo
Indiana Senate approves income tax cut. Here's how much you would save.
The Indiana Senate approved a bill Tuesday that could reduce Hoosiers' income taxes, bringing Indiana closer to becoming a no-income-tax state. A family making about $70,000, the median household income in Indiana, could save about $140 in income taxes per year starting in 2030 under Senate Bill 451 from Sen. Travis Holdman, R-Markle. Someone making $100,000 could save about $200. Per state law, the income tax rate is already decreasing over the next five years until it reaches 2.9% in 2027. Senate Bill 451 would lower it further to 2.85% in 2030, but only if state revenue grows more than 3% year-to-year. The income tax rate would lower further in even years beyond 2030 if state revenues continue to grow above that pace. Holdman's bill allows the income tax rate to completely phase out, but that would take more than 100 years. The bill also leaves the door open for lawmakers to act in the future, he said. "If the legislature wants to, they can suspend the income tax rate reduction during odd numbered session years," Holdman said in a statement to IndyStar. According to a fiscal analysis of the bill, the initial income tax cut in 2030 would cost the state $76 million per year. Subscribe to our politics newsletter Holdman has in the past said he wants to eliminate the state income tax. In 2023, the senator carried a bill, which created the task force that studied state and local income taxes over the last two years. Representatives from the Indiana Chamber of Commerce and the Indiana Manufacturers Association testified in support of the bill in a Senate committee hearing last week, saying it would provide relief to Hoosiers and make Indiana more competitive with states around the country. The bill unanimously passed the Indiana Senate on Tuesday. It now heads to the House where lawmakers could amend the proposal. 2025 lndiana Legislative Session: Lawmakers could cut taxes in 2025. Here's what to expect Contact IndyStar state government and politics reporter Brittany Carloni at or 317-779-4468. Follow her on Twitter/X@CarloniBrittany. This article originally appeared on Indianapolis Star: Indiana Senate approves income tax cut. Here's how much you would save
