That\u2019s the title of Wisconsin Policy Forum Focus #9<\/a>\u00a0released earlier this week.<\/p>\n Here\u2019s what Wisconsin imports in the way of goods:<\/p>\n Here\u2019s what Wisconsin exports<\/strong><\/em> (from Wisconsin Policy Forum, Brief #6, 2025<\/a>):<\/p>\n Notice that industrial machinery and electrical machinery are the top two categories in both imports and export; that\u2019s intra-industry trade.<\/p>\n What these two graphs don\u2019t tell you is what share of exports are accounted for by imported inputs. I don\u2019t have this information at the Wisconsin state level but here are estimates at the national level. I\u2019ve circled in red the corresponding categories, in the figure below.<\/p>\n Source:<\/strong> Slok, \u201cForeign value added in US exports,\u201d Apollo, May 1, 2025.<\/em><\/p>\n Why is this important to Wisconsin. Assuming these ratios are representative for Wisconsin, this means that tariffs on imports into the US result in negative effective rate of protection for exports.<\/p>\n Consider an exported machine tool, which originally sold for $100,000 (under free trade). If a tariff of 10% is applied to imported inputs, of total value of $40,000. The\u00a0 Then the effective rate of protection is -6.7% (=((100,000-44,000)\/60,000))-1). = 0.067.<\/p>\n Going to reality, if imported components account for about 12.5%, and a 30% tariff is applied to inputs (say they\u2019re Chinese). then the effective rate of protection is -4.1%\u2026<\/p>\n Here are Wisconsin imports through March:<\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/05\/wi_importcomp.png\")
<\/a><\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/05\/wisc_exportcomp.png\")
<\/a><\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/05\/Slok_importcomponentexports.png\")
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![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/05\/wiscexportspix.png\")
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