BAKERSFIELD, Calif. (KERO) — As President Trump's tariffs go into effect, local experts warn of potential economic strain and rising costs in Bakersfield and Kern County.
- President Trump's new tariffs will impose a 10% universal rate across all U.S. trade partners starting April 5.
- Economists warn of potential 'stagflation' and immediate negative impacts on California's economy.
- Local professor Richard Gearhart predicts significant harm to Kern County's agricultural sector and import/export activities.
President Trump unveiling his highly anticipated Liberation Day tariff plan, aimed at revitalizing American manufacturing and addressing trade imbalances. While the administration touts potential long-term benefits, economists warn of immediate impacts on the U.S. economy.
While industry experts say the adjustments in manufacturing could take months, even years, to make a significant impact, economists say the financial impact will be felt much sooner, especially for California. In fact one local economics professor claims this is about the worst case scenario in terms of tariffs. P
"Best case scenario is that inflation is going to be close to 4% with the best case scenario for tariffs, worst case scenario, you're looking at height of the Biden inflation back to eight or 9%," said Associate Professor of Economics at Cal State Bakersfield Richard Gearhart.
As President Trump announced new and retaliatory tariffs on countries across the globe, Gearhart warns that California — a major handler for foreign imports — could see up to half of those imports and exports eliminated.
"A second area where California is going to be really hit is agriculture, in part because a lot of countries will levy retaliatory tariffs on ag products, namely China," he said.
For us in Kern County, Gearhart suspects the agricultural sector will face significant harm, especially if other countries retaliate with their own tariffs as China did back in 2018.
"In 2018 we compensated farmers to the tune of $23 billion due to that trade war," he said. "Estimates for this trade war could be as high as 50 to $75 billion in just subsidy payments to farmers."
Another impact to be felt will be Trump's 25% tariff on all foreign-made automobiles. While it won't be immediate, local car dealers said price increases are inevitable.
"Some of that will be absorbed by the manufacturer, some of it will be reduced customer incentives and some of it will be passed on to the consumer," said John Pitre at Motor City Buick, GMC.
Cost of living and economic growth is another concern for Gearhart, suspecting trade, transportation, and warehousing in Bakersfield will be particularly hard hit, with potential reductions in imports and exports leading to half-empty warehouses.
When asked if there was any positive that can come out of these tariffs, Gearhart responded: "You know, local manufacturing, it's not a large part of our economy, but we could see local manufacturing, especially out in East Kern with steel production plants, or raw material mining, those sorts of things."
Gearhart said as far as cost of living in Bakersfield, a typical middle class household nowadays can live comfortably with a combined income of around $80,000. He suspects that over the next fives years with inflation impacted by these tariffs that number will go up to around $90,000 to $95,000. Gearhart warns consumers now is the time to start saving as much as possible
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