Local economists weigh in on what would make tariffs 'successful'

While President Trump has walked back some of his proposed tariffs, some still remain in place. Particularly, on China, a major agricultural trading partner.

Economists say South Dakota, due to its economic strengths being the agriculture and manufacturing sectors, is in position to be hit hard by potential retaliatory tariffs.

“The market for agricultural goods is far too small for the domestic market, we need the global market for our farmers to benefit and sell across the board.”

That’s Creighton University economist Ernie Goss. He said if negotiations lead to a freer market, that should be considered a win.

“If all those tariffs, if they came down and resulted in lower tariffs, that’s success,” Goss said. 

President Donald Trump temporarily paused most tariffs — except China, which now faces a 125% rate. The rest of the world still has a flat 10% tariff on U.S. exports. Trump said that 75 countries have called to negotiate trade terms with the U.S.

Dave Spencer is an Assistant Professor of Business for Mount Marty University. He agreed with Goss that if Trump’s tactics lead to a freer market, it would be successful. But he said it’s important to keep an eye on other factors with impacts on the American economy.

“The price of oil is down over $10 a barrel. That’s huge savings for the American economy. You know, we don’t talk about that. That’s a whole other commodity, a whole other field, but the administration wanted to get energy prices down," Spencer said. "They’re not unreasonable where they’re at today; I’ve spent a lot of time in the energy business. But that might be something that would be considered a break on our taxes, or a break on our costs, our inputs, our daily costs, our business costs."

Tariffs have had an impact on oil prices, mainly causing fluctuations in prices on the global market. Some economists, like Spencer, say the drop indicates a win for the American economy due to lowered input costs for industries. Trump made that a goal for the Administration.

Others argue if prices remain too low, it will help some industries who utilize oil but hurt the U.S.’s domestic production of crude oil in the long run