Tennessee may gain factories from tariffs. Its existing factories may pay more first.

by Brandon Burley

The Redemption Project Newsroom

Tennessee is the kind of state President Donald Trump’s tariff policy is supposed to help.

It builds vehicles in Smyrna, Chattanooga and Spring Hill. It makes tires, batteries, transformers, metal parts and aircraft components. It exports whiskey, cotton, food and forest products around the world.

Tennessee’s factories do not operate outside those supply chains.

They buy imported aluminum, steel, electronics, engines, machinery and specialty components. Tennessee farmers, distillers and manufacturers also sell into foreign markets that may retaliate.

The tariffs could help Tennessee build more.

They could also make what Tennessee already builds more expensive.

That is the tradeoff.

On July 20, Trump announced additional 50% tariffs on selected Canadian goods, including categories tied to motor vehicles, alcoholic beverages and dairy products. The White House said the duties are intended to answer Canadian policies it says discriminate against American commerce. The new duties are scheduled to take effect Aug. 19 and apply to covered goods even if they would otherwise qualify under the U.S.-Mexico-Canada Agreement.

The administration also expanded an aluminum policy meant to encourage companies to build or modernize U.S. smelters. Companies with approved American investment plans may receive reduced tariff treatment on a corresponding amount of imported primary aluminum.

Earlier in July, Trump issued a proclamation involving imports of commercial aircraft, jet engines and aircraft parts after the administration concluded that dependence on foreign production could impair national security. The proclamation directed negotiations aimed at addressing the national-security concern and left open the possibility of additional import actions if those agreements are not reached, carried out or effective.

The theory behind these actions is not simply that imports are bad.

The case is that price is not the only measure of national prosperity. A country also needs factories, skilled workers, metal production, aircraft capacity, vehicle supply chains and the ability to make essential goods during war, pandemic or disruption.

Supporters argue that trade is not truly free when another country subsidizes its own producers, blocks American access, uses provincial rules to favor domestic products or treats U.S. goods worse than competitors’ goods.