BAKERSFIELD, Calif. (KERO) — Economists warn of price hikes and potential retaliatory tariffs affecting national and local economies, like Kern County.
- President-Elect Trump plans to impose a 25% tariff on imports from Canada and Mexico, and an additional 10% on imports from China.
- Economists argue that these tariffs will increase prices and negatively impact the U.S. economy.
- Kern County, known for its agricultural exports like grapes, almonds, and pistachios, could face retaliatory tariffs affecting local producers.
- The U.S. is the top importer globally, with China, Mexico, and Canada being major trade partners.
- Retaliatory tariffs may result in reduced demand for U.S. commodities, impacting local economies like Kern County.
For your convenience, the skimmable summary above is generated with the assistance of AI and fact-checked by our team prior to publication. Read the full story as originally reported below.
Broadcast transcript:
On Monday, President-Elect Trump is set to be inaugurated as the 47th president of the United States. Over the last handful of months, he has touted a tariff plan and plans to impose tariffs on Canada, Mexico, and China.
"There's no debate amongst economists, or really amongst anyone who's looked at the effect of tariffs historically. Every time they're levied, prices go up by the amount of the tariffs," says Bryan Tomlin, CSU-Channel Islands Economics Department Chair.
That's Bryan Tomlin, chair of Cal State Channel Island's Economics department, who said in his mind Trump's sweeping tariff policy will hamper the U.S. economy in a broader-reaching sense.
"This is this is an extraordinarily ill-advised policy that is that it's one of these remarkably bad policies that just doesn't work for anybody that both raises prices and decreases output, right? It's not like a tax cut, which will put upward pressure on prices as people have more money in their pocket to spend, but at least it'll stimulate growth. This does the opposite, right? Because the things that you're putting tariffs on, these are key inputs across the board. So if you put a 25% tariff on Canadian lumber and Canada is a giant forest, we got a lot of lumber from them. That's going to raise the prices of lumber by about 25%. It's sort of like if you remember what happened during COVID, it's like that, but self-inflicted," says Tomlin.
Trump plans to place a 25% tariff on all imports from Mexico and Canada on the first day of his presidency. The president-elect also said he intends to levy an additional 10% fee on all imports from China. According to the Office of the United States Trade Representative, the United States is the top importer of goods in the world totaling out to $3.2 trillion dollars worth of imports in 2022, with China being the top importer followed by Mexico, and Canada. The US is also the second largest exporter of goods, behind China, with the top three places US goods are going being Canada, Mexico, and China in that order.
Over the last handful of weeks, as President-Elect Trump has touted his plan to levy tariffs on other countries, other countries have announced that there's a chance that they could levy retaliatory tariffs on the US. CSUB Economic professor Dr. Aaron Hegde says this is where producers here in Kern County could see an impact.
"The majority of the ag production here in Kern County, which is like close to $8 billion dollars worth, is exported. So most of that would be up for retaliatory tariffs, in which case that reduces the demand for the US commodity," said Hegde.
According to the Kern County Department of Ag 2023 Report, the major commodities exported from Kern County include things like grapes, almonds, and pistachios to name a few. While it's not clear in the report what percentage of the product from Kern County was exported, the items listed as major commodities exported account for over 5.5 billion of the 8.62 billion dollars in gross value reported.
Hegde says the introduction of tariffs on imports in the US economy could provide an immediate influx of funds, but the ramifications of retaliatory tariffs could spell more trouble down the line.
"You might see the revenue right away, but then the costs are delayed. There's a lag for the cost. And then when you do see it, it has such a wide impact on the economy, it's spread out through the economy that it's hard to capture, so it looks like, oh, we've made this revenue from the tariffs, so this is a good thing. But then you're not capturing all of the costs, which is a bad thing, right?" said Hegde.
President-Elect Trump takes office on January 20th. In a Truth Social post made late last year, he said implementing tariffs on Mexico and Canada will be one of the many executive orders he plans to sign on day one.
In Bakersfield, Sam Hoyle.
Stay in Touch with Us Anytime, Anywhere:
