The silhouette of idle blast furnaces are seen during sunrise at the U.S. Steel Corp. Granite City Works facility in Granite City, Illinois, U.S., on Wednesday, Oct. 25, 2017. U.S. Steel Corp. is scheduled to release earnings figures on October 31. Photographer: Luke Sharrett/Bloomberg
President Donald Trump wants to level the playing field for American companies in the global economy, but his combative stance has unsettled business plans from the Atlantic to the Pacific.From Washington cherry farms to Midwestern chemical plants to New England lobster-trap makers, the risk of global trade war is creating anxiety among executives whose firms rely on foreign markets for revenue or to keep costs down with imported products.On Friday, Trump announced $50 billion in tariffs on imports from China. Those came on top of levies he'd put on imported steel and aluminum from the European Union (EU) and Canada, which provoked anger and frustration that erupted rancorously at a Group of Seven summit last weekend in Quebec.China responded to Friday's announcement with trade threats of its own: It vowed to impose tariffs with “equal scale, equal intensity” on imports from the U.S., and said in a statement on its website that all of the country's earlier trade commitments are now off the table. The EU is targeting iconic products like Harley-Davidson motorcycles and Levi's jeans.As Trump disrupts the rules that have governed global trade for decades, the prospect of a standoff is rippling through U.S. regions, industries, and economic sectors, touching every aspect of business.

Fears at the Border

In Clinton County, New York, a decision 25 years ago to tie its future to its proximity to Montreal paid off. About 15 percent of its population of 80,000 works for a Canadian or border-related employer, according to Garry Douglas, CEO of the North Country Chamber of Commerce in Plattsburgh. Direct annual economic impact from cross-border commerce amounts to more than $2 billion a year. Tariffs threaten that.“Most are hopeful this is all tactical and will eventually be resolved,” Douglas said. “The uncertainty, however, is already having a chilling effect on decisions by companies regarding cross-border investment and deals.”Similar fears loom in Florida, bound to Latin America and the Panama Canal with 14 deep-water seaports. The Florida Chamber of Commerce estimates that a quarter of the state's economy depends on trade to some extent.But in Granite City, Illinois, the sound of blast furnaces roaring back to life is the area's hope. U.S. Steel Corp. plans to hire about 300 people to restart a second furnace at its plant there to satisfy fresh demand for American-made steel, the company said this month. It resumed operations in March after Trump announced the tariffs based on national-security grounds.The town of about 30,000, just across the Mississippi River from St. Louis, was founded around the steel industry, said James Amos, its economic development director. More workers at U.S. Steel mean more people buying gas or grabbing lunch. “It really does put a real smile on people's faces,” Amos said.Elsewhere in America's industrial heartland, though, companies are on edge. Many have built supply chains that source parts from all over the world.“Uncertainty in terms of trade and global flows like that isn't good,” said Blake Moret, chairman and chief executive of Rockwell Automation Inc., a Milwaukee producer of industrial systems.Some companies are delaying capital projects. Tariffs are clouding investment decisions and raising construction costs, said A.B. Ghosh, North America president of Akzo Nobel NV's specialty chemical business. While the Dutch company will proceed with a $100 million upgrade of an Illinois plant, “it may stop us from doing other investments,” Ghosh said.

Transportation of Goods at Risk

Companies with links to Mexico are particularly worried. Mexico has been hit with steel tariffs, and Trump has threatened to pull out of the North American Free Trade Agreement (NAFTA).Union Pacific Corp. has connections at six border crossings, and 12 percent of its volume originates or ends in Mexico. The Omaha, Nebraska-based railroad also owns a 26 percent stake in the Mexican railroad Ferromex.“The worst fear would be the trade war in general,” said Rob Knight, CFO of Union Pacific. “Does Mexico come up with some other retaliatory action?”Growers of apples, pears, and cherries in Washington, Oregon, and Idaho are rushing to figure out what they can do with perishable fruit that's now the target of retaliatory tariffs in markets such as China, India, and Mexico. Mark Powers, president of the Northwest Horticultural Council, said its 4,700 growers in those states export about $1 billion worth of produce each year. Finding new, tariff-free markets requires lengthy negotiations between countries."Quantifying the results of this is a guessing game," he said. "We're already seeing customers coming back and asking for discounts and offsets."Cherries are a pressing concern, particularly because members are enjoying a bountiful crop. The fruit lasts only about seven days once picked, and most exports are shipped in planes to Asia."If China closes, that's our largest cherry market, and it's hard to divert on the fly," Powers said.

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