Portland-based clothing company Wildfang received a shipment from China right before President Donald Trump announced a 152.5% tariff on all Chinese goods.
If that order had gone through just 48 hours later than it did, it would have cost Wildfang nearly $180,000 extra because of Trump鈥檚 tariffs, CEO Emma Mcilroy told Gov. Tina Kotek during a roundtable at Salem鈥檚 Chemeketa Community College on Wednesday.
鈥淲e believe manufacturers our size are going to go under,鈥� Mcilroy said.
She joined fishermen, clothing and food manufacturers, winemakers and drink distributors in describing the extraordinary costs Oregon鈥檚 small and medium-sized companies now face to import essential products for their businesses.
Many of the businesses have paid millions on imports since April 9, they told Kotek, when Trump issued a 10% import tariff on nearly all goods coming into the U.S.
For other Oregon businesses, it鈥檚 retaliatory tariffs that could sink the ships.
European Union leaders recently added a 25% tariff on Oregon shrimp to a list of retaliatory tariffs against the U.S. Nick Edwards, a lifelong shrimp fisherman out of Coos Bay, exports 50% of his catch, and nearly all of it goes to Danish buyers who are now looking elsewhere, he told Kotek.
Kotek called the information 鈥渟obering鈥� and said the state was willing to work with businesses to come up with plans to respond to the chaotic federal changes.
鈥淲e are resilient. We are creative. We will think of some things,鈥� she said.
Oregon consumers will pick up much of the tab for tariffs, according to federal and state economists.
Kotek was joined by State Treasurer Elizabeth Steiner, who said federal economists estimate Trump鈥檚 tariffs will cost the average U.S. household $3,800 more per year. The Treasury鈥檚 statewide 鈥溾�� published in January found the average Oregon family does not have an extra $500 available to cover emergencies.
鈥淚f they can鈥檛 find $500 for an emergency, how will they find an additional $3,800 to pay for essentials?鈥� she said.
Trey Winthrop, CEO of Bob鈥檚 Red Mill, based in Portland, confirmed that consumer prices would soon continue to rise.
鈥淥ur hand is being forced to pass some of these increases on to the American consumer, people already hurting the most with inflation through grocery prices,鈥� he said.
Outlook from state economists
Oregon鈥檚 state economist, Carl Riccadonna, came to the roundtable with two major messages to share with businesses at the roundtable. The first was to from Business Oregon, the state鈥檚 economic development agency, so it can gather more information about tariff impacts.
鈥淎t economic turning points, the feedback from business is absolutely critical,鈥� he said. 鈥淲henever there is any shock to the economy 鈥� a hurricane, an earthquake, trade tensions 鈥� the first step is to evaluate the problem, collect the data. You can鈥檛 address the problem if you don鈥檛 understand the scope of the problem.鈥�
Second, he said, is that the full impact of these tariffs on Oregon鈥檚 economy 鈥� measured by growth of new or existing businesses, increases in hiring and decreases in inflation 鈥� likely won鈥檛 be known until mid-summer. In the meantime, he said, the state is looking at historical changes that could paint a picture of what鈥檚 ahead.
Before Trump鈥檚 2018 tariffs on steel, aluminum and other imported materials, Oregon鈥檚 economy was growing by about double the pace of the national economy, Riccadonna said. Following the tariffs, Oregon鈥檚 growing economy almost immediately shrunk by about 2.5 percentage points.
If the 10% tariff was in place last year, he said, Oregon businesses would have paid $7.4 billion in tariffs on $28.2 billion of imports.
The state is heavily dependent on trade and on manufacturing exports, according to Damon Runberg, an economist at Business Oregon. Oregon is the 20th biggest trade state in the U.S., he told the roundtable.
鈥淭hat might not sound like a very high ranking, but we are the 26th largest economy. So relative to the size of our economy, trade is disproportionately important for us,鈥� he said.
Other countries retaliate
Winthrop of Bob鈥檚 Red Mill, as well as drink distributors and wine industry representatives at the roundtable, described distress over the future of their Canadian markets. Bob鈥檚 Red Mill has been exporting to Canada for 25 years, Winthrop said.
Recently, a Canadian news program did a segment called 鈥渂uy or bye,鈥� he said, showing a litany of U.S.-made products next to Canadian alternatives. Bob鈥檚 Red Mill pancake mix was marked as 鈥渂ye,鈥� next to a Canadian brand marked 鈥渂uy.鈥�
鈥淭he message is very clear: Canadians should not be buying U.S. brands, and we鈥檙e seeing that impact,鈥� he said. 鈥淚 feel very strongly that once we have long-term clarity on the tariff situation, there will be lasting damage to our export market there, and we will not be able to sell our products to the country.鈥�
Wine producers described orders being returned or terminated from Canadian sellers and Steve Gibbs, a lobbyist for Washington-based beverage distributor Columbia Distributing, said Canadians are turning away from Oregon beers. Nearly 45% of Oregon beer exports go to Canada, Gibbs said.
Of all Oregon exports, 88% are from small and medium sized businesses like Bob鈥檚 Red Mill and craft breweries, said Curtis Robinhold, executive director of the Port of Portland.