Inside San Diego: Trade war being felt locally

Posted at 5:17 PM, Aug 08, 2018

The trade war between the United States, China and many other countries is continuing to escalate.

The Trump administration is now working toward imposing tariffs on another $200 billion worth of imports from China. The countries are imposing tariffs on each other, and there's no sign of any of this letting up. 

President Trump says he's working to level the playing field, reduce U.S. trade deficits and protect American technology.

The U.S. is now targeting thousands of products, including aluminum, steel, and smaller ones that make microwaves and flashlights.

Meanwhile, San Diego companies and consumers are caught in the middle.

"Really, before it even hit, when there was just talk of it in the industry, all that uncertainty really made people nervous," said Paul Cleary, executive director of the nonprofit GRID Alternatives, which installs solar panels on low-income homes.

The organization buys its panels on the open market, and many of them are imported. Cleary said the Trump Administration's 30 percent tariff on the panels, and the reaction on the market, has added about a $1,000 to the cost of each install. That's meant some layoffs and canceling raises. 
And this is just one sector in San Diego.

"The war is definitely ramping up," said Lynn Reaser, chief economist at Point Loma Nazarene University. "And this is causing a lot of consternation on the part of businesses in particular."
Reaser says most of the tariffs are on parts of products that Americans buy.

For example, a 10 percent tariff on aluminum could marginally increase the price of a can of soup or soda.

The San Diego Regional Chamber of Commerce reports that San Diego's craft beer industry has faced order cancellations, and that costs are rising for local infrastructure projects. Meanwhile, a lumber tariff is adding to home prices.

Paola Avila, the chamber's vice president of international business affairs, added that there are impacts on shipbuilding, public infrastructure projects, industrial and commercial building.

Reaser said that the list of products the U.S. plans to impose tariffs on doesn't include popular consumer items like toys, pharmaceuticals, apparel, and cellular phones.

She also says a stronger dollar is helping American consumers with more buying power when it comes to mitigating price increases.

Other countries, such as China, are now imposing tariffs on U.S. exports such as soybeans and pork. Reaser said that's making it hard for farmers who make those products to break into those foreign markets. It could lead to a higher supply here in the U.S., meaning there could be some price decreases for American consumers.

Cleary says dealing with the tariffs has been a challenge - but he says GRID alternatives is just going to up its fundraising goal and dig in. 

"Hopefully we're working through it and just keep our heads down," he said," and keep doing the work that we're doing."