06-02-2025
How Kentucky-made products could be impacted by potential tariffs
KENTUCKY (FOX 56) — Over the weekend, President Trump announced plans to impose tariffs on Canada, Mexico, and China.
Although the tariffs intended for Mexico and Canada have been suspended for at least a month, Kentucky could still see potential impacts.
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We previously reported how Bourbon could be impacted by these tariffs, but that's not the only thing we produce in Kentucky that could be affected.
'The auto industry is a big exporter,' said KYPolicy executive director Jason Bailey. 'We export peanut butter; we export post-it notes. You know, there are just certain things that Kentucky produces that are bought all over the world.'
But what exactly are tariffs?
Tahsin Huq, assistant professor of finance at EKU
'A tariff is essentially a tax imposed on imported goods and services,' assistant professor of finance at Eastern Kentucky University, Tahsin Huq, said. 'So if you're importing, let's say, car chips, to us, essentially you're giving a tariff or you're giving customs duties that are essentially taxes on that import product or service.'
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When companies import goods, they pay the tariffs to the U.S. government.
However, experts warn those costs eventually get passed on to American consumers through higher prices.
'We are expecting that initially might go very high or relatively and doesn't necessarily mean it will always stay that high because there are other factors in the economy that can also bring the factors down,' added Huq.
One of those factors would include bringing back manufacturing into the U.S. economy.
'Because in the long term, if you're able to bring back manufacturing, then you are creating the product within you, right? So now there's going to be more competition within the domestic firms themselves,' Huq said. 'And that itself can also create a healthier competition within the US economy, and that can bring our prices down as well.'
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Bailey said the Commonwealth is among one of the most vulnerable states because of the amount of manufacturing we do.
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