Kentucky businesses stockpile products subject to tariffs

Kentucky is best known for horses, bourbon and a certain brand of fried chicken.

What most people don't realize is that the state is an emerging manufacturing powerhouse south of the border.

Janet Harrah is the senior director of economic analysis and development at Northern Kentucky University.

She says the state ranks third behind Texas and Louisiana in total exports, with Canada as its primary customer.

Cars and lights trucks, auto parts and machinery are the biggest contributors to the nearly $8-billion in exports to Canada in 2017.

But Harrah worries that the impact of the tariff battle between the US and Canada hasn't been fully felt. That's because companies stockpiled steel and aluminum in advance of Donald Trump's decision to impose the so-called national security tariffs on Canadian steel and aluminum under section 232 of the US Trade Expansion Act.

ATech Automotive Technology is one of those Kentucky companies that pre-ordered raw materials in anticipation of the tariffs.

The company in Walton, Kentucky employs about 50 people who build auto repair simulators to train mechanics in the increasingly sophisticated computer systems built into vehicles.

Bruce Breitholle is the company's vice-president of operations. He says the company brings in parts from Canada, and the Canadian military is one of its biggest foreign customers.

Breitholle worries that Donald Trump's style of negotiating has hurt business ties with both Canada and Mexico... even though a provisional deal has been reached.

"I don't negotiate or deal with people the way my president does," he says. "I don't want to get into all that but we're definitely concerned with how it affects our business with Canada or anybody else."

Edwin Webb is the CEO of Kentucky World Trade Centre.. his group works with hundreds of others Edwin Webb is the CEO of the Kentucky World Trade Centre. 

His group represents hundreds of businesses in the state that do business with clients overseas.

He says the economic relationship with Canada is "second to none" and just too important to be derailed by the tone of the talks, or the rhetoric used by the president.

And he warns the deal the new USMCA trade deal needs to be ratified before anyone starts making investment and other decisions.