SC Gov. Henry McMaster on tariffs

South Carolina Gov. Henry McMaster talks Wednesday, Aug. 15, 2018, about tariff proposals by his ally, President Donald Trump. McMaster told The Associated Press that he understands people's concerns but thinks a wait-and-see approach is best. AP Photo/Meg Kinnard

COLUMBIA, S.C. — As the national debate over potential implications of the Trump administration's tariff plans continues, one of the president's earliest allies stressed this week that he's made the administration aware of South Carolina's concerns but still thinks a wait-and-see approach is the best way to proceed.

On Wednesday, South Carolina Governor Henry McMaster told The Associated Press that he has had repeated conversations both with the president and members of his administration about the tariffs but reiterated that, particularly in business dealings, he sees it as imperative not to make rash decisions before specifics are implemented.

"They're proposals. My recommendation is to understand what's being discussed, understand the reason it's being discussed, and, when the decisions are finally made, we'll deal with that," said McMaster, stressing that the president is well-aware that he will continue to advocate for policies that are best for South Carolina, even if they run counter to the administration's proposals. "There has been a lot of concern about things that were proposed that have never been implemented."

McMaster's comments came a day before White House economic adviser Larry Kudlow told reporters that the United States and China were resuming trade talks, raising hopes for a way out of an intensifying dispute between the world's two largest economies. This meeting, scheduled for later this month, would be the first between senior U.S. and Chinese officials since the June 3 talks in Beijing ended with no settlement.

The United States has already imposed taxes on $34 billion in Chinese goods, drawing Chinese retaliation. President Donald Trump is readying tariffs on $216 billion more, and Beijing has vowed to counterpunch with its own trade sanctions.

Some South Carolina companies have expressed worry the tariffs will hurt them too, especially foreign automakers and their suppliers. Volvo from Sweden isn't sure it can now keep its promise to hire 4,000 workers by 2021 at its recently opened plant near Charleston. And BMW has written top Trump administration officials saying that depending on how steep the tariffs are, some or many of its 10,000 workers at its plant near Spartanburg may be at risk.

But on Wednesday, McMaster noted that the plans, while making some nervous, have led other domestic companies to ramp up production. Earlier this week, Century Aluminum President and CEO Mike Bless told analysts that the company was hiring new workers, giving the tariffs credit for allowing American industry to reinvest for long-term competitiveness. This month, the Chicago-based company also reported a 21 percent increase in second-quarter sales. Full-year production is expected to be up more than 60 percent over last year.

Tariffs have become a key issue in this year's South Carolina governor's race, in which McMaster is seeking his first full term. Elevated from his post as lieutenant governor when Nikki Haley became Trump's U.N. Ambassador last year, McMaster — one of the president's earliest supporters in the 2016 campaign — has Trump's full backing in this year's race. The president traveled to a fundraiser for McMaster last fall and campaigned with him on the eve of the GOP runoff election earlier this year.

Earlier this month, Democratic nominee James Smith warned that McMaster's relationship with Trump may have helped him win a contested GOP primary but would hurt the state in the long run because of crippling tariffs. On Aug. 6, Element TV company announced it was laying off more than 100 employees at its Fairfield County plant because of a planned 25 percent tariff on Chinese products — which include television components Element uses.

Shortly after Element's announcement, Smith warned the problem would worsen as bigger foreign manufacturers attracted by South Carolina's low taxes and business incentives find themselves paying a significant import tax. Trump said the tax evens the playing field for American companies, but business leaders worry it could lead to more layoffs and even shuttered plants.

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McMaster "cares more about his friendship with the president than the people of South Carolina," Smith said in Winnsboro, less than a half-mile from the Element plant. The television maker was the first significant South Carolina company to say it was hurt by the tariffs, although company officials said on Twitter they think they accidentally ended up on the tariff list and hope their parts are removed before they plan to lay off all but eight employees on Oct. 5.

Farmers are about to realize how retaliatory tariffs on food hurt as harvest season approaches, Smith said. Anyone who needs steel for construction is hoarding materials now, and that extra spending is giving the economy a false boost before the import taxes take a huge chunk out of South Carolina's recovery from the Great Recession, he added.

"Why wait for what we know is coming," asked Smith, who said McMaster should be talking to every single person he knows in Washington if he is worried about South Carolina losing jobs.

On Wednesday, McMaster noted that, while he's sympathetic to companies and workers worried about the tariffs' possible ramifications, it's important to have a long view when it comes to economic policy.

"I would say to those who are concerned: there is concern. It's legitimate concern," McMaster said. "But let's be patient, and let's provide as many facts as we can and fashion what we think is the right result. But remember this: since the president has been in, the economy has just gone through the roof."