A range of experts, from Nobel Prize-winning economists to an internet-famous menswear writer, have a message for Americans who voted for Donald Trump based on his promises to bring down prices: This likely won鈥檛 go how you want.
Some voters cited the cost of living as a factor in their decision to elect Trump to a second term as president. But with inflation actually starting to ease, his proposed tariffs, which the president-elect has called the 鈥�,鈥� could actually raise prices again.
While some experts don鈥檛 think more tariffs are a bad idea, the majority of economists and other experts who spoke with CalMatters echoed 23 Nobel laureates who warned that Trump鈥檚 policies would be worse for the economy than the ones proposed by Vice President Kamala Harris. Those economists calling Harris鈥� economic agenda 鈥渧astly superior鈥� to Trump鈥檚, and mentioned tariffs as one reason.
鈥淗is policies, including high tariffs even on goods from our friends and allies and regressive tax cuts for corporations and individuals, will lead to higher prices, larger deficits, and greater inequality,鈥� the economists wrote.
Businesses that import goods into the country must pay the tariffs. They tend to pass on their increased costs to consumers, with some executives recently during their earnings calls. So economists largely view tariffs as a tax, in the nation.
While tariffs could raise prices for all U.S. consumers, California could feel the brunt of the impact in part because of the countries Trump singled out during his campaign: China and Mexico. Those two countries accounted for .
鈥淭he port and logistics complex in Southern California is a very important part of the economy, and directly tied to the countries he threatened,鈥� said Stephen Levy, an economist and director of the Center for Continuing Study of the California Economy, an independent, private research organization in Silicon Valley.
Trump imposed tariffs during his first presidential term, and President Joe Biden maintained some of them. During his campaign this time around, Trump said he intends to impose tariffs of 10% to 20% on all imports, and has mentioned even higher tariffs on goods from China (60%) and Mexico (100% to 200% on cars).
Such tariffs could exacerbate California鈥檚 already high cost of living and raise the prices of cars, technology and electronic products, medical devices, groceries and more. Also, as the state saw during Trump鈥檚 first term 鈥� which included a trade war, with countries retaliating with their own tariffs on U.S. exports 鈥� California鈥檚 agricultural industry is likely to feel the effects. Trump鈥檚 proposed tariffs could also have an adverse effect on the state鈥檚 ports, which are among the nation鈥檚 busiest.
And all of those outcomes could have a ripple effect on jobs in the state, including those in agriculture, trade and manufacturing.
What the state鈥檚 ports expect
Trade experts say it鈥檚 too early to tell how the state鈥檚 ports could be affected, though some of them also said they expect a near-term surge in activity as businesses brace themselves for tariffs by importing more goods now.
鈥淟ong Beach and Los Angeles are two of the largest ports in the U.S.,鈥� said Jonathan Aronson, a professor of communication and international relations at the University of Southern California, who studies trade and the international political economy. 鈥淭heir traffic would presumably slow in both directions鈥� if Trump imposes tariffs, Aronson said. Like other experts, though, he wondered if the president-elect is using the threat of tariffs as a negotiating tactic 鈥� say, to pressure Mexico into doing more to limit immigration into the United States.
The most recent available data for the Port of Los Angeles, which is the busiest in North America and handles nearly 10% of all U.S. imports, shows that trade activity rose nearly 19% at the port in September from the same month a year ago. September imports totaled $27.9 billion, a 20% increase year over year. There鈥檚 a chance those numbers could head the opposite direction as a result of tariffs.
鈥淪ignificant increases in tariffs, and the possibility of retaliatory tariffs, could have a significant impact on traffic 鈥� and jobs 鈥� at the port,鈥� said Phillip Sanfield, a spokesperson. 鈥淲e鈥檙e monitoring developments closely.鈥�
鈥淎s a West Coast seaport, our primary trading partner is Asia, and what鈥檚 happening right now is that retailers are expecting a short-term shipping surge in advance of new tariffs.鈥�Robert Bernardo, spokesperson, Port of Oakland
The Port of Los Angeles says nearly 1 million California jobs 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 Southern California jobs tied to trade. Chief Executive Mario Cordero said, through a spokesperson, that he is waiting to see what trade policies Trump actually will adopt: 鈥淎t this point we expect that strong consumer demand will continue to drive cargo shipments upward in the near term.鈥�
The Port of Oakland, whose trade-related jobs at both the airport and seaport number about 98,000, also expects a traffic boost at first. Spokesperson Robert Bernardo: 鈥淎s a West Coast seaport, our primary trading partner is Asia, and what鈥檚 happening right now is that retailers are expecting a short-term shipping surge in advance of new tariffs.鈥�
Mike Jacob is the president of the Pacific Merchant Shipping Association, a not-for-profit maritime trade association whose members facilitate trade. They include ocean carriers, marine terminal operators and more.
Jacob, too, said he is expecting trade activity to pick up ahead of whatever tariffs Trump imposes: 鈥淕iven the lack of understanding of the timing, scope and scale (of the tariffs), you鈥檙e more likely than not to move cargo earlier.鈥�
As a result of tariffs during Trump鈥檚 first term, Jacob said there was 鈥渁 small bump in cargo back in 2019 that resulted in additional impacts on our logistics chain.鈥� He said after that experience, which was then followed by pandemic-related chaos, the industry might be a little more prepared to deal with possible supply-chain disruptions.
Possible effects on manufacturing
The San Diego Regional Chamber of Commerce is worried about potential tariffs on goods from Mexico. Kenia Zamarripa, a spokesperson for the group, said the CaliBaja region 鈥� which includes San Diego and Imperial counties and the Mexican state of Baja California 鈥� is interconnected, with a multibillion-dollar supply chain. The region鈥檚 logistics facilitate 80% of the trade between California and Mexico, she said.
The nation鈥檚 top imports from Mexico in September 鈥� worth at least $2 billion for each category 鈥� were petroleum and coal products, computer equipment and motor vehicle parts, according to the most recent statistics from the U.S. Census Bureau鈥檚 Bureau of Economic Analysis.
Some specific products that are imported into the U.S. from Mexico through California include the Toyota Tacoma. The truck and its components are made in Baja California and elsewhere in Mexico. 鈥淚magine taxing each component before it goes to Mexico and back,鈥� Zamarripa said.
She added that the region also leads in producing medical devices, and that the importance of that became apparent during the beginning of the pandemic when 鈥渁 bunch of companies shut down, not knowing that a little metal piece they were producing was a vital part of a heart monitor, for example.鈥�
Mexico鈥檚 economy minister, Marcelo Ebrard, said this week if Trump imposes tariffs, though President Claudia Sheinbaum has seemed more open to negotiations.
Lance Hastings, chief executive of the California Manufacturers & Technology Association, said he鈥檚 well aware of the disruption tariffs can cause. When Trump put tariffs on aluminum and steel imports, aluminum prices rose at least 25%, Hastings said. 鈥淚 was in the beer industry when it was put in, and we felt it,鈥� he added.
Hastings also said the anxiety around Trump鈥檚 proposed tariffs stem in part from the fact that 鈥渨e鈥檙e still trying to get the supply chain back to normal鈥� after the pandemic. Because 鈥淐alifornia is the gateway to Asia, the state would feel the impact of more tariffs first and more than everybody else,鈥� he said.
Made in the USA
Yet there is a bit of optimism among those who think some tariffs could actually help California manufacturers.
Sanjiv Malhotra, founder and CEO of Sparkz, a maker of lithium batteries, said tariffs could benefit his company and the rest of the domestic battery industry amid the increasing popularity of electric vehicles.
Sparkz, which will get its materials from West Virginia and make batteries at a plant in Sacramento, 鈥渋s all U.S.-sourced. Nothing is coming in from China,鈥� Malhotra said.
During his campaign, Trump indicated he would try to roll back emission-reduction rules and . But Malhotra, who served in the U.S. Energy Department under the first Trump administration, said that as demand for lithium batteries grows, he believes Trump鈥檚 incoming administration will understand that they 鈥渘eed to be made here in the U.S. so we are not dependent on China for batteries.鈥�
鈥淭he port and logistics complex in Southern California is a very important part of the economy, and directly tied to the countries he threatened.鈥�聽Stephen Levy, economist and director, Center for Continuing Study of the California Economy
Kate Gordon, CEO of California Forward, a nonprofit organization that focuses on the state鈥檚 economy, said that while it鈥檚 important to get back some of 鈥渨hat we鈥檝e lost over the past couple of decades鈥� 鈥� the nation once led in solar panels 鈥� it 鈥渘eeds to happen deliberately and with attention to where we鈥檙e really competitive.鈥�
鈥淲hat would be terrible would be tariffs on things where we鈥檙e no longer competitive, like parts of the solar supply chain, which for a long time,鈥� she said. All that would do is drive up prices, Gordon said.
Americans may say they want things to be made in the USA, but they also don鈥檛 want to pay higher prices for them, said Derek Guy, based in San Francisco who has covered the clothing industry for more than a decade. A few years ago, Guy about American Apparel, under new ownership, offering U.S. consumers the option of paying a little bit more for clothing made here vs. similar pieces made overseas.
鈥淓ven based on a few dollars, when someone wasn鈥檛 looking over (their) shoulder, people chose the foreign version,鈥� Guy said.
鈥淎 lot of manufacturing in the U.S. has long shifted toward the higher-end,鈥� Guy said. 鈥淭he kind of cheaper clothes we鈥檙e talking about (what most Americans buy) are made elsewhere.鈥� Tariffs would raise those prices.
The price of almonds
California鈥檚 top agricultural exports include almonds, wine, dairy products, pistachios and other nuts.
During Trump鈥檚 first term as China imposed retaliatory tariffs on the U.S., , according to the University of California Giannini Foundation of Agricultural Economics.
In addition, almond prices sank, prices fell from $2.50 a pound to $1.40 a pound in 2018. That had a negative impact on an industry that generates $4 billion to $5 billion a year and employs about 110,000 people, according to the website of lobbying group Almond Alliance.
Amanda Russell, a spokesperson for the Almond Alliance, said in an emailed statement: 鈥淚n previous trade negotiations, President Trump demonstrated a commitment to supporting agriculture, and we are optimistic about continuing this partnership to address the challenges and opportunities facing our growers and stakeholders.鈥�
Besides tariffs, another likely action by Trump that could affect the state鈥檚 agriculture industry is mass deportations 鈥� .
鈥淚 can鈥檛 see any benefit to California if he goes through with mass deportation,鈥� said Levy, the economist in Silicon Valley. 鈥淓ven the threat of deportation will affect the labor pool.鈥�
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