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Workers train for production of S60 sedans at Volvo Cars' new manufacturing plant in Berkeley County. A new report says manufacturers like Volvo will be hurt by tariffs, leading to slower growth in South Carolina's economy. File/Wade Spees/Staff

South Carolina's economy is due to cool off through the end of this year as tariffs and fewer exports from the Port of Charleston take a toll on the automotive, aerospace and manufacturing sectors, according to a Kiplinger report.

"About 15 percent of the state's GDP is exported, the third-highest in the nation, and 6 percent of the workforce is directly employed by foreign firms, so the trade war that is beginning is likely to hurt," Kiplinger said.

For example, the Trump Administration's proposed 25 percent tariffs on automotive parts would affect the roughly 400,000 engines that Upstate carmaker BMW imports each year from Europe.

"Any of those cars exported back to Europe would be subject to the European tariff, which is likely to increase from its current 10 percent level," Kipling said.

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A trade war also would hurt the state's ability to recruit foreign industries — something South Carolina does better than anyone else with the nation's highest per-capita rate of foreign direct investment from 2016 to 2017.

Construction of new homes will continue to be a strong point for the Upstate and coastal region, including the Charleston area, where prices are surging because of high demand and low inventory. Both of those regions also are seeing wage inflation, with unemployment rates dropping to historically low levels.

 

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_