Table of Contents

An analysis drawn from a paper prepared for this case study by Edward (Ned) Hill1

Ohio is ground zero for the Trump administration’s trade agenda, which aims to revive the vitality of steel, aluminum, and automobile assembly industries and support coal and nuclear electricity generation. Ohioans welcome the attention to their heartland industries and communities. However, they also worry that actions to help some industries will come at the expense of others. It remains to be seen whether, once the dust settles, the actions will ultimately benefit Ohio and its middle class; however, the prospect is not high. While rising steel prices and increased market shares of domestic producers will benefit current workers, managers, and stockholders in the metal-making industries, increased steel costs will decrease profits, sales, earnings, and employment in metal-using industries. There are thirty-six jobs in Ohio’s metal-using manufacturing industries for every job in steel and aluminum manufacturing. Also, the metal-using industries have larger supply chains, and the ripple effects from decreased earnings and employment will swamp gains from the spending of steel workers.

That said, the net impact of the current trade conflict on Ohio’s industries cannot be assessed in isolation from its impacts on the U.S. and global economy—as those impacts will, in turn, affect Ohio’s economy. Nor can the direct economic impacts within Ohio be meaningfully analyzed at this stage. Insufficient data exist on the impact of the June 2018 steel and aluminum tariffs and the subsequent retaliatory measures. Some of the most negative side effects for Ohio’s economy appear to have been averted for now, as a result of the side letters accompanying the renegotiation of NAFTA and conclusion (though not yet ratification) of the USMCA. The letters aim to hold Canada and Mexico harmless if global tariffs are implemented for automobile and light truck imports and for automotive parts.

In other words, it is too soon to be declaring the winners and losers in Ohio of the Trump administration’s trade measures. But it is possible to gauge the ripple effects already reverberating throughout the state’s industries.

As one of the nation’s top three steel-producing states,2 Ohio would be expected to benefit from the Trump administration’s imposition of a 25 percent tariff on imported steel. Recent investment announcements support that view. Three plants in Ohio are slated to reopen or expand, and a fourth is recruiting a new shift of twenty-five workers.3 U.S. steelmakers, including Ohio-based TimkenSteel and those with Ohio operations, have reported increased sales and profits and a return to “fair pricing.”4 Note, however, that some investments had been in the works months before the Trump administration took action,5 and steel prices have been trending upward since March 2016.6 In reality, tariffs represent only one data point among many in a company’ calculations, and long-term market conditions must be right before millions of dollars are invested in new or reinvigorated steel and aluminum production.

The higher prices associated with tariffs may lead to higher profits and employment levels for Ohio’s steel producers, but they may also threaten steel-using industries important to the state’s economy. Ohio ranks second in the nation in the number of automotive parts suppliers and number of cars produced.7 Higher steel and aluminum prices should drive up the cost of Ohio-made cars and trucks and provide more reason for moving assembly out of the United States or for depressing sales of new cars. In September, Ford Motor Chief Executive Officer Jim Hackett said that “metal tariffs took about $1 billion in profit. . . . If it goes on longer, there will be more damage.”8 Such words sound ominous for the 6,150 Ford workers in Ohio.9 Honda, which employs 15,000 Ohioans, also reported “hundreds of millions of dollars in new costs.”10

Ohio also is a leader in manufacturing household appliances, and many of those manufacturers are heavy users of steel. Higher prices for these products could potentially make cost-conscious consumers choose cheaper brands made in other countries or delay making purchases. In July, Whirlpool, which employs 9,800 Ohioans, suffered a 14.5 percent one-day drop in share price—its worst in more than thirty years—after steel and aluminum price increases were blamed for lower quarterly earnings.11 All told, the 11,400 Ohio steel and aluminum production workers are far eclipsed by the 410,000 Ohio workers in industries that use steel and aluminum.12 That means that those deriving benefits are far outnumbered by those in the metal-using manufacturing industries and in their supply chains who are likely to face negative effects.

In addition, Ohio is home to industries subject to retaliatory tariffs imposed by other countries. Ohio’s iron and steel mill products are the most exposed, with $1 billion in exports being subject to retaliatory tariffs. Corn and soybeans (commodity crops) are in second place and could be the state’s largest area of loss due to foreign competition. Soybeans also play a dominant role in Ohio’s agricultural exports, with China being the principal customer. Since China has levied a 25 percent duty on the crop, farmers are expecting major losses in the Chinese market share and steep declines in soybean prices.13 June market prices for soybeans were already 70 cents a bushel below a typical farmer’s breakeven price.14 Analysis by the U.S. Chamber of Commerce reveals that $5.7 billion in 2017 shipments from Ohio can be affected by retaliatory tariffs imposed on the United States by Canada, China, the European Union, and Mexico; this is a diverse bundle of products, including agricultural crops, steel and fabricated metals, soaps, prepared foods, and cosmetics.15

Finally, mere uncertainty over the imposition of tariffs has a significant price in terms of delayed or lost investment dollars that Ohio businesses crave. As a senior economist in Ohio’s state government recently stated, “most companies are taking a ‘wait and see’ approach before committing dollars, investment, or production. Overall there is way too much on-again, off-again news [for them] to make a definitive decision.”16


1 This appendix is drawn from a longer paper prepared by Professor Edward (Ned) Hill for this project and will be published separately by the John Glenn College of Public Affairs at The Ohio State University, accessible at

2 Ohio Steel Council, “A Revitalized Steel Industry,”; and Rex Nutting and Andrea Riquier, “Here Are the States Most Impacted by Steel Tariffs,” Market Watch, March 9, 2018,

3 Katie Nix, “Republic Steel to Restart Furnace by September,” Chronicle-Telegram, June 26, 2018,; Paul Giannamore, “JSW Steel To Get Tax Credit for Mingo Junction Steel Plant,” Intelligencer, September 27, 2018,; and “JSW Steel to Invest $500M in Acero Junction,” Business Journal, June 22, 2018,; and Jon Chavez, “Delta’s North Star Steel Plant May Get $700M Upgrade,” Toledo Blade, August 13, 2018,

4 “Steel Profits Soar, Showing Power of Tariffs,” Argus Media, August 20, 2018,; “TimkenSteel CEO Says Tariffs Are Helping U.S. Companies, but Canton Company’s Stock Dives After Earnings Report,” Akron Beacon Journal, July 27, 2018,; and “Timken Reports Strong Second-Quarter 2018 Results; Raises Full-Year Outlook,” Timken News Archives,

5 Mark Law, “Mingo Junction Steel Mill Purchase Almost Complete,” Intelligencer, June 18, 2018,; JSW Steel to Get Tax Credit for Mingo Junction Steel Plant,” The Intelligencer, September 27, 2018,; “JSW Steel to Invest $500M in Acero Junction”; Chavez, “Delta’s North Star Steel Plant May Get $700M Upgrade”; and Republic Steel, “Republic Steel Has Invested $12 Million in Its Plants Over the Last 18 Months Preparing for Increased Market Demand,” PR Newswire, June 22, 2018,

6 Producer Price Index for the steel industry, U.S. Bureau of Labor Statistics,

7 “The Automotive Industry,” TeamNEO, January 26, 2016,

8 Keith Naughton, “Ford CEO Says Trump Metals Tariffs Took $1 Billion of Profit,” Bloomberg, September 26, 2018,

9 Ohio Development Services Agency, “Ohio Major Employers—Section 1,” May 2018,

10 Ohio Development Services Agency, “Ohio Major Employers—Section 1”; Jessica Wehrman, “Honda, Auto Industry Caution About Impact of Tariffs,” Columbus Dispatch, September 27, 2018,

11 Ohio Development Services Agency, “Ohio Major Employers—Section 1”; Michael Sheetz, “Whirlpool Shares Plunge 14.5%, Post Worst Day Since 1987 as Tariffs Wreak Havoc With Costs and Suppliers,” CNBC, July 24, 2018,

12 Nutting and Riquier, “Here Are the States Most Impacted by Steel Tariffs.”

13 Paul Davidson, “Chinese Appetite for American Soybeans Could Spur Compromise on Tariffs,” USA Today, August 30, 2018,; and Ohio Soybean Association, “Ohio Soybean Farmers Will Experience Long-Term Consequences if Trade Dispute Continues,” September 26, 2018,

14 Kaitlin Schroeder, “China Tariffs Sink Prices for Ohio Soybean Farmers,” Dayton Daily News, July 6, 2018,

15 U.S. Chamber of Commerce, “Trade Works for Ohio. Tariffs Don’t.,”

16 E-mail communication with E. Hill, received on September 5, 2018.