New tariffs not likely to impact Fayette County job market very much

• REBECCA BIBBS, For the News-Examiner

Fayette County is likely to fare better than many surrounding counties in spite of the tariff wars between the United States and its top three trading partners.

Tariffs are taxes imposed by governments on imported goods, including raw materials and finished products, to protect domestic industries or to raise revenue. They are paid by the shipper at customs when they enter a country, but that cost usually is handed down to the consumer.

President Donald J. Trump in March levied new 20 percent tariffs on some imports from China, bringing that country’s total tariff rate up to 33 percent. China retaliated with tariffs up to 15 percent on agricultural goods – including Indiana staples corn and soybeans – from the U.S.

The tariffs also cover steel and aluminum, which affects automobile and parts production throughout Indiana.

Trump placed some tariffs on Canada and Mexico earlier in March and has threatened and then rescinded tariffs since taking office on Jan. 20.

Most recently, the president announced 25 percent tariffs to start April 2 on foreign automobiles and car parts. These tariffs are expected to affect products from Mexico, Canada, China, Japan and South Korea.

The New York Times published a county-by-county map of the United States on March 15 showing how tariffs on goods from nations such as Canada, Mexico and China could affect each county.

According to The New York Times’s analysis, the tariffs are expected to impact 8.5 percent of workers in Indiana overall.

In Fayette County, 300 jobs could be affected – 5 percent of total available local jobs.

The potential impact of tariffs on Fayette County is expected to be lower than surrounding counties and around the state. For instance, the shares of jobs affected by the tariffs in nearby Henry and Rush counties are in the double digits at 14 percent and 15 percent, respectively.

The actual jobs number is Rush County is 800, compared to Henry County’s 2,100.

According to the Indiana Department of Workforce Development, the annual unemployment rate for Fayette County in 2024 was 4.4 percent, a little higher than the state average of 3.4 percent. As of January 2025, the county rate was 4.5 percent, the same as the state average in the same month.

Economists consider a normal unemployment rate to be around 5 percent.

Though The New York Times stressed that the share of jobs affected does not mean a certain rise in unemployment, it could be an indicator of how the county might fare through potentially tough times ahead.

According to the Budget Lab at Yale University, the tariffs are expected to cost American households upwards of $1,600 a year.

Dan Parker, CEO of the Fayette County Economic Development Group, said the tariffs are unlikely to have a huge effect on jobs or the local economy unless they drive down vehicle sales.

“Connersville has faced bigger issues like plant closures over the last 25 years, but we’re still here,” Parker said. “I don’t think we’re coming close to any of the things that we experienced in the past.”

The number of jobs impacted depends on: which industries have been targeted with tariffs; which nation is the source of tariffed raw goods and finished products; and the level of tariffs placed on items.

For instance, President Trump placed tariffs on steel, and China retaliated with tariffs on corn and carmakers. According to the U.S. Bureau of Economic Analysis, manufacturing accounts for 1,298 jobs in Fayette County, or about 15.2 percent of the total workforce.

Tariffs were central to President Trump’s campaign platform for the 2024 election. However, the nation already had a previous experience that could serve as an indicator of the effects of tariffs.

During his first term, Trump imposed tariffs on imported solar panels and washing machines, and steel and aluminum from most countries. The president set separate tariffs on goods imported from China.

“It’s not even a good chess game. It’s like playing whack-a-mole,” Parker said.

An analysis published in 2024 by the Massachusetts Institute of Technology concluded that retaliatory tariffs placed on the U.S. by other nations after Trump’s 2018 tariffs had a negative effect on U.S. jobs, primarily in agriculture.

MIT found that any financial benefit the U.S. industries received was outweighed by the retaliatory tariffs, even as the Trump administration provided subsidies to American businesses and industries hurt by those tariffs.

According to the Budget Lab at Yale University, the tariffs are expected to cost American households upwards of $1,600 a year.

“Once we get past the shock of this new reality, we’ll go back to business as usual,” Parker said.

Parker said he hasn’t heard much discussion about the tariffs among local businesses. He attributed that to not having much of a voice with the federal government.

“We’re basically powerless, small communities like Connersville,” he said. “Short of pulling a rabbit out of your hat, there’s not much you can do.”