Donald Trump’s proposed tariffs, especially on China and Mexico, could hit California hard

The Port of Los Angeles says nearly 1 million jobs in California are related to trade at that port.

The Port of Long Beach handles about 3% of all U.S. imports and has about 575,000 trade-related jobs in Southern California. Chief Executive Mario Cordero said through a spokesman that he was waiting to see what trade policies Trump would actually adopt: “At this point, we expect strong consumer demand to continue driving cargo shipments upward in the near term.”

The Port of Oakland, which has about 98,000 trade-related jobs at both the airport and the port, also expects an initial increase in traffic. Spokesman Robert Bernardo: “As a West Coast port, our primary trading partner is Asia, and what’s happening right now is that retailers are expecting a short-term shipping surge ahead of the new tariffs.”

Mike Jacob is president of the Pacific Merchant Shipping Association, a nonprofit merchant shipping association whose members facilitate trade. They include ocean carriers, marine terminal operators and more.

Jacob also said he expected trade activity to pick up before Trump-imposed tariffs: “Given the lack of understanding of the timing, scope and scale (of the tariffs), you’re more likely to not move the cargo sooner.”

As a result of tariffs during Trump’s first term, “there was a small increase in cargo in 2019, which resulted in additional impacts on our logistics chain,” Jacob said. He said that after this experience followed by pandemic-induced chaos, the industry may be a little more prepared to deal with possible supply chain disruptions.

Possible effects on production

The San Diego Regional Chamber of Commerce is concerned about potential tariffs on goods from Mexico. The CaliBaja region, which includes San Diego and Imperial counties and the Mexican state of Baja California, is connected by a multibillion-dollar supply chain, said Kenia Zamarripa, a spokeswoman for the group. He said the region’s logistics facilitate 80% of trade between California and Mexico.

The nation’s top imports from Mexico in September (worth at least $2 billion for each category) were oil and coal products, computer hardware and motor vehicle parts, according to the latest statistics from the U.S. Census Bureau’s Bureau of Economic Analysis.

Some specific products imported to the United States from Mexico to California include the Toyota Tacoma. The truck and its components are manufactured in Baja California and elsewhere in Mexico. “Imagine if every component was taxed before it went to Mexico and before it came back,” Zamarripa said.

He added that the region is also a leader in medical device production, and the importance of this was revealed at the beginning of the epidemic “when a group of companies closed down, not knowing that a small metal part they produced was a vital part.” for example, a heart monitor.”

Mexican Economy Minister Marcelo Ebrard said this week: He said he would hit the USA with tariffs Although President Claudia Sheinbaum appears more open to negotiations if Trump imposes tariffs.

Lance Hastings, executive director of the California Manufacturers and Technology Association, said he is aware of the disruptions the tariffs could cause. Hastings said aluminum prices rose at least 25% when Trump imposed tariffs on aluminum and steel imports. “I was in the beer industry when this was released and we felt it,” he added.

Hastings also said concerns about Trump’s proposed tariffs stem in part from the fact that “we’re still trying to get the supply chain back to normal” after the pandemic. “Because California is the gateway to Asia, the state will feel the impact of more tariffs first and harder than anyone else,” he said.

Made in the USA

Still, there is some optimism among those who think some tariffs could actually help California producers.

Sanjiv Malhotra, founder and CEO of lithium battery maker Sparkz, said the tariffs could benefit his company and the rest of the domestic battery industry due to the growing popularity of electric vehicles.

Sparkz, which will source its materials from West Virginia and manufacture the batteries at a facility in Sacramento, is “all US-sourced. Nothing comes from China,” Malhotra said.

Trump said during his campaign that he would try to roll back emissions reduction rules and He said he would oppose banning gas-powered vehicles. But Malhotra, who served at the U.S. Department of Energy during the first Trump administration, said he believes that as demand for lithium batteries increases, Trump’s new administration will realize that they “need to be made here in the United States to not be dependent on China.” for batteries.”