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As the United States and China face off over tariffs and trade policy, some of Indiana’s most important industries are right at the center of the dispute.

Indianapolis Business Journal reported that over the past several weeks, the two countries have imposed tariffs on specific items and threatened tariffs on others. The lists include steel, aluminum, pork, soybeans, corn, motor vehicles, chemicals and other products from industries heavily represented in the Hoosier state.

In fact, Indiana is the nation’s top steel-producing state as well as being the most dependent on manufacturing, which relies on steel.

“Indiana is central to all of this stuff,” said Mark Muro, a senior fellow at the Metropolitan Policy Program at the Brookings Institution, a Washington, D.C.-based public-policy think tank. “It is not surprising that your state is affected in multiple ways.”

It’s a complex situation. Some of the tariffs have already been implemented while others might not be, if the two countries can reach an agreement. The recently enacted tariffs are helping Hoosier industries in some cases, while hurting in others.

The Indiana Manufacturers Association hasn’t commented yet on the impact of tariffs. But on March 8, the Steel Manufacturers Association — a nationwide trade group — issued a statement supporting the 25% tariff that has since been imposed on imported steel.

Michael Hicks, a professor of economics and business research at Ball State University, said that because steel is a commodity, steel prices tend to be consistent across manufacturers. So when the price of imported steel went up as a result of tariffs, the price of U.S.-produced steel rose as well.

That might be good news for steel mills and aluminum smelters, but it’s bad news for downstream industries that use these commodities in their own products

From motor vehicles to industrial machinery to the train wheels that transport a product to market, Hicks said, steel is “part of the production of, ultimately, almost everything that we manufacture.”

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