The tariffs have not yet reached the supply chain in Aawalt in Malibu, but the hardware store and the wood seller will be ready for strong price increases in the coming weeks.
The majority of the wood that sells the business comes from Canada and almost all steel products are produced in China, said General Manager Rieff Anawalt. In these countries together with Mexico, in his second term of office by President Trump, tariffs were targeted on Fiefen, who triggered a global trade war that reinforced this week.
“These tariffs will have a 100% impact on us,” said Anawalt. Wholesaler for the family-run hardware company, which has five locations in Los Angeles County, warned him that the prices will increase by April 1, which he has to pass on to customers.
“We will record great increases: 15% to 25% in this industry,” he said. “The Covid prices will make it appear cheap.”
Throughout California, companies of all art farmers, car manufacturers, housing construction companies, technology companies and clothing dealership-AB are spent on weeks of the Reflected Tariff Chaos Top three trading partnersSome implement some while changing, delaying or reversing others.
“It is a daily soap opera, and like a soap opera you get relief, then it heats up again,” said Jonathan D. Aronson, professor of international communication and international relationships at USC.
As a result, business owners “do not know what will happen,” he said. “You can't plan. You don't know how much to produce. You don't know who your business partners will be. “
This month was particularly turbulent. On March 4, Trump's 25% tariffs appeared on imports from Canada and Mexico with a limit of 10% on Canadian energy. He also doubled the tariff for all Chinese imports to 20%. All three countries swore back with their own measures.
A wooden yard in British Columbia, Canada, last month. Canada is the largest foreign wood supplier for the USA
(Bloomberg about Getty Images)
The next day, Trump granted US car manufacturers a one-month liberation for his new tariffs for imports from Canada and Mexico. The day after, he said he postponed many tariffs for Canadian and Mexican imports for a month.
On Monday, China imposed on the farmers in California and in the USA Remanding tasks of up to 15% On American agricultural products such as chicken, corn, beef, beef, pork, wheat and soybeans. On Wednesday, Trumps came into force 25% tariffs for all steel and aluminum imports.
In order to compensate for the effects of tariffs on their conclusion, companies may have to revise their business, said Jerry Nickelsburg, faculty director of UCLA Anderson forecast.
“The way companies react to this uncertainty is not to put all eggs in a basket,” he said. “So reduce how much you would order, which means that you produce less and need fewer people – or if not fewer people, fewer hours for the people you have.”
The youngest volleye came on Thursday morning when Trump threatened to place a 200% tariff About wine and alcohol from the European Union in response to the EU, which proposes a 50% tariff to American whiskey. About an hour later he wrote in one Post -observation post In the truth that the United States “has no free trade. We have” stupid trade “.”
“The whole world tears us !!!” he said.
Strengthening the economy was one of Trump's core promises during the election, and the tariffs are the key to its strategy. On his first day of the office in Mexico, Canada and China, he threatened to explain the decision to go into illegal immigration and drugs.
But the Escalage trade voltages Keep the Wall Street beaten for three weeks. On Thursday, the S&P 500 closed in the correction area and ended the day by 1.39%. The index is now 10.1% below its record on February 19. Dow Jones's industrial average fell by 537.36 points or 1.3% and closed 40,813.57.
The fallout for farmers
The longer back and forth has also unsettled companies, both those who import goods from abroad, as well as those who sell their products to foreign customers. The Californian economy could be hit particularly hard Because of its strong dependence on trade in China and Mexico and because of its position as a global agricultural power pack.
Bauer Joe Del Bosque holds a raw almond in Firebaugh, California.
(Robert Gauthier / Los Angeles Times)
California farmers Show the largest proportion of nation of nation-more than a third of the region's vegetables and more than three quarters of its fruit and nuts are grown here – And the fertile soil of the state is an important provider of products in countries around the world. The farmers also rely heavily on fertilizer from Canada, which could cost more if the tariffs go to maintenance.
“The farmers in California are particularly seriously injured because almonds, soybeans and such things are great exports from the United States,” said Aronson.
The state also turns out about 85% of the wines In the United States, thousands of winegrowers and wineries produce and houses many of them small and generations old. The Wine Institute says The industry supports employment for more than 420,000 Californians and generates economic activities of $ 73 billion in the state. Canada is the largest market for California wine.
A flood of activity in the ports
Some companies in the LA region have the stock in stock to be ahead of the price increases connected to the tariffs, said Stephen Cheung, Managing Director of Los Angeles County Economic Development Corp.
“Many of them were hit quite hard with China during the last trade war,” he said, “so they knew better than waiting and hoping for the best.”
This was reflected in shipping data from the ports in Long Beach and Los Angeles, which thanks to several months of the front charge before Trump's inauguration continues to record large numbers.
The port of Long Beach moved 765,385 equivalent units or teus in February, an increase of 13.4% compared to the previous year. The growth in January compared to the previous year was even greater: 952,733 TEU-a measuring unit, which is based on the volume of a standard shipping container, corresponds to an increase of 41.4%.
An aerial absorption of the port of Long Beach.
(All J. Schaben / Los Angeles Times)
After Trump launched a trade war with China during his first term, the port of Long Beach lost about 20% of the expected Chinese freight in 2019, said Managing Director Mario Cordero. This was supplemented by a 10% increase in imports from countries in Southeast Asia, including Vietnam, Indonesia and Thailand. He expects the same thing this time.
In the coming months, Cordero said that the local economy could see disorders of the supply chain, similar to during pandemic: “If we continue the path aggressively and high -proof tariffs”.
The port of Los Angeles expects the volume to be reduced by 10% in the middle of Trump's tariffs against China compared to the previous year, said executive director Gene Seroka.
It is a daily soap opera, and like a soap opera you get relief, then it heats up again.
– Jonathan D. Aronson, professor of international communication and international relationships at USC
As one of the largest seaports in the country, the LA port has had a strong increase in the freight since last summer when companies were registered in expectation of potential Trump tariffs. Almost 10.3 million teus, an almost record, passed through the port last year.
These figures are likely to fall down when the tariffs take up and the economy is set, Seroka said. “Fewer containers mean fewer jobs.”
LA companies try to adapt
Economists say that it is difficult for companies to change suppliers quickly, and some could refuse to improve their supply chains in view of the constantly changing nature of Trump trade policy.
Some try anyway.
Francesca Grace, interior designer and home in Los Angeles, said the tariffs have already influenced the availability and price of articles such as fabrics, wood and other building materials as well as smaller decorative pieces.
In some cases, the delays in the supply chain have extended their project time plans to three to six weeks out of immediate availability, and it struggles with the cost of materials from China with “climbing at least 25%”. As a result, she now tries to procure all of her products on site, of 75%.
“While this shift matches our values, it will also lead to our pricing increases,” said Grace. “We do everything we can to avoid that our pricing is increased too much. The last thing we want is that these changes negatively influence our business or make our designs inaccessible. “
Other companies say that they have little choice when it comes to getting their goods.
“Wood prices are what they are. There is no procurement where it is elsewhere, so we have to deal with how it comes, ”said Anawalt, General Manager in the Malibu Baumkt. “It is so beyond my control that I can't do anything. I was in panic at first, but now I'm just waiting. “