Tariffs on China seen as ‘necessary evil’ by WMC members

Wisconsin Manufacturers & Commerce President/CEO Kurt Bauer

WMC President and CEO Kurt Bauer says the group’s latest survey of state business leaders shows they see tariffs on China as “a necessary evil.” 

Of the 204 survey respondents, 47 percent percent said the tariffs are having a negative effect on their business. But a larger portion — 67 percent — said they support tariffs imposed on China. 

Bauer said the results surprised him, because he’s been hearing from many members expressing concern about the tariffs and the impact they’re having on their bottom lines. He told WisBusiness.com he thought more members would be opposed to the tariffs, based on what he’s heard. 

But, he said, the data “clearly shows they support it.” And he said responses gathered from the open-ended section of the survey, where respondents can explain their answers, helped him understand the unexpected results. 

According to him, many of the surveyed members acknowledged in that section that tariffs are harming their businesses but said they still support the attempt to address “trade inequities” with China. 

WMC included in its release of the survey results one anonymous response: “Our company is being hurt by the tariffs, but I feel the U.S. needs fair trade throughout the world.” 

When asked about what the state government can do to help out businesses, 33 percent of survey respondents said they want health care to be more affordable. A further 21.5 percent say they want reduced taxes, and 19 percent said they want reduced or reformed regulations. 

According to Bauer, the “most obvious” fix for the health care concern is to enact a fee schedule for the worker’s compensation program. He says it’s a “huge expense” for employers in Wisconsin. 

“There’s no discipline, there’s no controls… If you want to control costs, you have to have a fee schedule,” he said. 

More broadly, Bauer says Wisconsin Manufacturers and Commerce members are looking for market solutions to high health care costs. 

“Whenever you have competition, you drive down prices,” he said. “Our members believe there’s not as much competition in health care as in the industries they’re in.” 

Bauer said he’s “essentially obsessed” with the workforce shortage, as concern continues to grow among WMC members. Eighty-one percent of respondents said they’re struggling to find employees, compared to 74 percent in December and 76 percent one year ago. 

Still, 78 percent of surveyed business leaders rate the state’s economy as either strong or very strong, which is unchanged from December. And 58 percent say the Wisconsin economy will see moderate growth in the next six months, also the same as December. 

But in a reversal from the last survey, 59 percent said Wisconsin is headed in the wrong direction. In December, 68 percent said the state was headed in the right direction. 

Bauer attributes that turnaround to new Democratic Gov. Tony Evers’ original budget proposal and statements related to raising taxes on businesses. 

The survey shows 90 percent of respondents said their business was profitable during the last six months, and 93 percent expect their business to be profitable during the next six months. Last time around, both of those numbers were slightly lower. 

See the full survey results: http://www.wmc.org/uncategorized/tariffs-are-biting-wisconsin-businesses-but-the-pain-may-be-worth-it/ 

–By Alex Moe