Trade tariffs cause whiplash at Port Milwaukee
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Sacha Pfeiffer visits Port Milwaukee to see how President Trump's tariffs have affected the flow of goods and impacted the regional economy.
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As we heard from those early voters in Texas and from coverage of the protests in France, the economy and affordability are surging concerns globally. It's also a concern locally in Milwaukee, where I'm hosting this program tonight. If you look at a map, you realize the city is located on a massive superhighway of water. Milwaukee is on Lake Michigan, part of the Great Lakes region, and that region is its own economy. Cargo from around the world is shipped across the Great Lakes, and all that maritime trade contributes to a regional economy worth about $9 trillion.
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Now look at that map again. Four of the five great lakes are shared between the United States and Canada. Those two countries are now in an economic battle due to President Trump's tariffs, and that fight is harming port cities like Milwaukee. That is why I found myself this week on a long concrete pier on the port of Milwaukee, overlooking the vast expanse of Lake Michigan and talking with port director Benji Timm.
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BENJI TIMM: So the boat is coming from the East. You can see the breakwater. There's a break in the breakwater out there. And there's...
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PFEIFFER: A little passage for boats to get through. Yeah.
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TIMM: Yes, between the light - the two lighthouses. That's where the vessels would come in. And if they're going into our inner mooring basin, they'd pass underneath the Hoan Bridge in the highway. If they're coming into one of our terminals here, they'd come straight in into one of these slips.
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PFEIFFER: So whether they're coming from Canada or Europe, that is the way they get in.
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PFEIFFER: Port Milwaukee does business with more than 300 ships a year that import goods from all over.
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TIMM: So there are steel beams on the terminal, and this steel came in from Luxembourg. It came in for a hospital project from Minnesota. It's unloaded from a vessel here, and then it's loaded up onto trucks and then trucked over to Minnesota.
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PFEIFFER: Can we not make this in the United States?
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TIMM: That was a special gauge of steel, I know.
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PFEIFFER: I mean, and is that partly what the Trump administration hopes for eventually, is that we can make this steel at home? And by these tariffs, we won't have to bring it in from Europe?
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TIMM: That's the idea, yeah, is that we increase our production here. And again, I don't think anybody would argue with that, but we have to put the components into place to get us to that point.
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PFEIFFER: Over the past year, Timm watched anxiously as the Trump administration added or threatened tariffs on all sorts of items - steel, auto parts, salt, agricultural commodities, timber. The tariffs could come at any time, and that affects the budgets and supply chains of countless companies that rely on this port.
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What is your distress level about the impact that tariffs are having on the Milwaukee economy?
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TIMM: It's kind of whiplash. You know, it's - it has not been consistent. When the administration makes an announcement, we listen very closely, and then we try and figure out how it'll affect us. We try not to freak out because oftentimes it'll change.
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PFEIFFER: Sometimes you're inclined to freak out?
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TIMM: Sometimes. You know, we try and reserve the freak out. But...
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PFEIFFER: Imported products were all around us in warehouses and silos and massive domed containers. So we got in a van with Benji Timm and the mayor of Milwaukee, Cavalier Johnson, to get an up close look.
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CAVALIER JOHNSON: This peanut butter spread of tariffs just, you know, across the board, it's kind of - it's harmful.
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PFEIFFER: Remember that steel? There is now a 50% tariff on foreign steel imports to the U.S.
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We are passing by a shipping bay where it looks like, I don't know, steel cord - what are we seeing stacked up there?
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TIMM: So those are coils of steel. That's the tin plate steel that's primarily imported from the Netherlands, and it comes here and is used in canning, like food cans. There are a number of canning...
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PFEIFFER: Things we see on grocery store shelves - that's how it starts, right there.
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PFEIFFER: One of the things that's been tariffed is steel, and a lot of steel comes into Milwaukee. How has that affected the steel coming and going?
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TIMM: So the steel that comes into Port Milwaukee is not produced by U.S. steelmakers, so it has to be imported. And the steel is down approximately 30%, and that's kind of systemwide. So it's expensive, and production is down. You know, costs are going up, so there are less sales overall.
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PFEIFFER: The goal of these tariffs by the Trump administration is to try to have more manufacturing done in the United States, and that will take time. When you talk to the businesses in your state and your city that are affected by the tariffs, how patient are they feeling about waiting to see if the tariffs have the payoff that the Trump administration hopes for?
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TIMM: Well, that's the thing, is that our businesses and our consumers - they shouldn't be subject to the whims, the ups and downs, the back and forth, the unpredictability, the instability that's happening out of Washington.
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PFEIFFER: And that instability can have international ripple effects.
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All right, so we are seeing a very large ship. It is not a container ship. What are we seeing?
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TIMM: So that's a bulk carrier vessel. It's from...
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TIMM: Bulk carrier, yeah. So they have bays within cargo holds within the vessel, where they store bulk materials.
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PFEIFFER: And did you start to say it's from Bulgaria?
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TIMM: So the vessel itself is from Bulgaria, and it's going to take the DDGs to Spain.
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PFEIFFER: Do you think people would be surprised to know that a ship from Bulgaria is stopping in Milwaukee to then deliver things to Spain?
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PFEIFFER: Near the Bulgarian boat are huge mounds of something covered with tarps.
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TIMM: So on the left, those are salt piles. So one of the biggest commodities that Port Milwaukee brings in is salt, and that salt is used for road safety. It's used for component animal feed. It's also used for water softeners. Last year, we had a pretty harsh winter, and states as far away as Kentucky, Minnesota, Iowa, were coming here to get salt.
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PFEIFFER: A lot of Milwaukee salt comes from Canada. The Trump administration wanted to put tariffs on that, too.
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When you heard that salt Well, salt and many other products may be tariffed, what was your concern for Milwaukee?
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TIMM: So because salt is the biggest commodity that we import here, that would have had a significant impact on not only the city of Milwaukee's budget, but also other municipalities' budgets.
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PFEIFFER: The Trump administration removed salt from its tariff list after lobbying from Congress.
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But back on the pier, Timm told me the uncertainty is destabilizing.
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TIMM: Everyone wants predictability. They want to be able to plan for the future. They want to be able to plan, you know, acquisitions, improvements, investments in their businesses. And that's hard to do when prices change so frequently.
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PFEIFFER: What is your worry level about whether this will take a change of administration to improve the situation, whether the Trump administration may eventually lower the tariffs and it will create some relief for Milwaukee?
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TIMM: Yeah, my biggest worry is our relationship with Canada and making sure that we keep that strong. So they're Wisconsin's largest trading partner. They're a significant part of our economy here in Milwaukee.
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The U.S. and Canada are so interlinked by the Great Lakes that a ship going between the two countries can cross the international border 27 times. They're partners.
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TIMM: It's really interesting. Because there's such a tight relationship between the United States and Canada, we have a lot of the same companies on both sides of the border, and essentially, we trade components, and we trade equipment back and forth. And when you have disruptions like tariffs, when you have other disruptions in the transportation network, it can be really harmful and really kind of just slow down business. So I'd...
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PFEIFFER: President Trump is trying to use tariffs to reshape global trade and protect the U.S. economy. But that's leaving people like Port Milwaukee director Benji Timm to reassure his city's foreign trading partners. He has to keep goods flowing nationwide and worldwide. He has to brace for products suddenly becoming more scarce or more expensive, and he has no idea when that volatility will end.
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PFEIFFER: Stay with us for more coverage from Wisconsin, an important bellweather state, where we are this weekend just ahead of the midterm elections.
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