TACOMA — Local trade officials are keeping an eye on looming tariffs proposed by the incoming U.S. president and are concerned not only about the inflationary risks but also potential damage to longtime relations with major trade partners Canada and Mexico.
Monday evening, President-elect Donald Trump took to social media site Truth Social to announce, “On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.”
He added, “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country! Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem.”
Fentanyl is a powerful synthetic opioid used in prescribed pain-management therapy but also available via illegal distribution, paving the way for overdose deaths of tens of thousands in the United States annually.
Trump on Monday also announced plans for an extra 10 percent on Chinese goods, citing lack of progress on curbing illegal fentanyl shipments to the United States from China through Mexico.
The president-elect has previously touted tariffs as high as 60 percent or more for products from China and up to 100 percent on all products from Mexico and up to 200 percent on cars made in Mexico.
‘Wrong tool’ to address border, drugs
Representatives of the ports of Tacoma and Seattle argue that tariffs are not the best or even correct tool to wield when it comes to improving border enforcement regarding immigration or drug trafficking,
Port of Tacoma Commission President Kristin Ang and Port of Seattle Commissioner Ryan Calkins spoke with The News Tribune on Tuesday about the latest Trump tariff announcements.
Ang noted that Washington state is one of the most trade-driven states in the nation with about 40% of jobs connected to international trade/national commerce.
“We’re hoping for smart, strategic trade policies that benefit the American people, rather than giving into rhetoric,” said Ang, adding that “across-the board-tariffs would simply harm American families. They end up paying for it.”
“I think if the issue is the amount of undocumented border crossings that happened at the southern border, tariffs are unrelated to that,” Calkins noted.
Instead, he cited the previously proposed bipartisan immigration bill in Congress could have “helped to support additional infrastructure at our border so that we could process more goods and be able to staff up those border crossings to catch more of the transit of illicit goods as well.”
“If what you’re talking about is the amount of fentanyl coming from Mexico into the United States,” Calkins said, “you’re bringing the absolute wrong tool to this issue with tariffs.”
Trade partners and supply chain
Ang cited statistics on the amount of Washington state’s trade with Canada alone.
“In 2023, Canada was Washington’s top market for agricultural goods, with exports totaling $1.3 billion and key exports including fish, seafood, apples, onions, frozen fruit and fresh, sweet cherries,” she said.
Ang also offered as examples the effects earlier tariffs had on Washington exports, noting that tariffs imposed in 2018 “devastated” its trade with China.
“We are geographically positioned to best trade with China, but we have focused our efforts also on other countries that would be viewed as our allies, like South Korea and Vietnam,” she said.
Vietnam, Ang added, “is a rising star with our gateway, to the point where we are having direct connection between Vietnam and our gateway, which has not happened before.”
With the introduction of new tariffs, retaliatory tariffs against the United States have to be anticipated, both Ang and Calkins noted.
“We buy a lot of food and a lot of energy from these two neighbors (Canada and Mexico), and they’re going to likely retaliate,” Calkins said. “That is just the way it works, in order to provide themselves with a negotiating position, to be able to eventually reduce those tariffs.”
Mike Fowler is executive director and senior trade consultant with World Trade Center Tacoma, a nonprofit that assists small and medium-sized Washington state enterprises with trade missions, consulting and educational programs.
He also spoke with The News Tribune this week, not on behalf of WTC, but in response to questions based on his own experience, opinions and perspective.
He noted Vietnam’s growing importance to the state, noting that among WTC Tacoma’s trade missions with firms, “We’ve gone to Vietnam twice, Japan three times, and China once in the last couple years.”
“… there’s been a lot of activity moving production, for example, out of China into Vietnam because of tariffs,” he said.
“The thing about tariffs is that it changes your supply chain very quickly,” Fowler said. “But the other thing that it does is it moves manufacturing pretty much not back to the U.S. but to other countries.”
In October, he warned of looming trade wars via new tariffs in a letter from the editor included in WTC’s newsletter, which stated, “All signs suggest that the damage would be the most devastating to Washington and the Pacific Northwest.”
“What worries me, and the reason why I wrote that article, was because we weren’t even talking about it — nobody was,” he said, adding, “Of course, we weren’t going to talk about it much until we knew who the president-elect was going to be.
“But now it’s here, and we really need to think about it,” he added.
As for advocating for local port issues, Calkins said the Northwest Seaport Alliance does work with the American Association of Port Authorities, a trade association representing 150 port authorities in the Western Hemisphere, as well as other major U.S. ports in both red and blue states.
“I’m sure that there are people that are close to the president-elect that are talking to him about its impacts on his home state, as well as the Gulf Coast ports,” said Ang, “and how much that would increase prices on goods and impacts on businesses and jobs.”
In his interview with The News Tribune, Fowler expressed concerns with an across-the-board tariff hike spiking U.S. manufacturing costs due to higher costs for parts.
“When your cost of production becomes more expensive, your competitiveness on the international marketplace, which is the most lucrative marketplace, becomes less because others don’t have to pay your high cost,” he noted.
Calkins added that risks to the ports didn’t even begin to touch on the region’s aerospace economy.
“We certainly want to be very cautious about anything that can potentially damage one of our state’s key industries, and we believe that aerospace is likely to get hurt by a trade war,” he said.
And as for any escalating trade war, “Ideally we can avoid that and continue to try to address the smaller issues related to trade,” Calkins said.
“But this is like bringing in a chainsaw, when what we need is a scalpel.”
