San Diego Chamber: Steel, Aluminum Tariffs Will Impact San Diego Businesses

>>Today the Mexican government made it official. It will impose tariffs on the list of American products in retaliation for the U.S. decision to place duties on Mexican steel and aluminum. At 25% tariff on imported steel and a 10% levity on -- levy on aluminum went into effect this month. The San Diego Chamber of Commerce is monitoring the effects of the tariffs in the retaliation after working for years to establish cross-border trade with Mexico. The chamber is concerned about a possible trade war and the effect on the San Diego economy. Joining me as Paula Avila that's president -- Vice President business affairs with the San Diego regional Chamber of Commerce. Do you believe we are in a midst of a trade war now? >> Yes. A trade war is defined by a country deciding unilaterally to impose policy that is detrimental on another country versus a trade agreement where you come to an agreement on trade policy. We have in place right now tariffs that impact other countries. And the response from other countries. That is a trade war that we are in. The question is who are we in a trade war with and how many more countries will be added. >>> How do you see the steel and aluminum tariffs affecting the San Diego County ? >> to start, the steel industry has a certain amount of jobs it supports. In San Diego and the U.S. A greater proportion are still dependent jobs. Manufacturing that uses steel inputs. That is where you will see the greatest detrimental impact. >>> Across the country you have 142,000 jobs that are supported by steel. You have 6.5 million jobs that are employed by steel consuming companies. >>> Is there any specific cross-border trade or industry that you are particularly concerned about when you start hearing about the base tariffs and how they may take hold? >> Here in San Diego, we have the largest medical device manufacturing cluster in the world when you combine it with Baja. Medical equipment uses steel and aluminum. The automobile industry. Again, the automobile industry is very large here. Shipbuilding. Think about construction. Whether it is residential, commercial, all of these construction projects use steel and aluminum inputs. >>> The chamber has worked hard to establish a binational business climate here in San Diego. Do you think that is threatened by the tariffs ? >> Yes, absolutely. All we have to point towards his history. The 1930s Holly tariffs which are well-known, infamous that exasperated the Great Depression. You see the cost of living increase in the cost of products to Americans increased. That has a detrimental impact on all of us because we are all consumers regardless of the trader industry you work in. >>> Some people who are opposed to the short-term effects to the tariffs, they said that there is a potential that these U.S. detection is tariffs could improve the U.S. economy in the long run. You see that as a potential for these tariffs ? >> No. In fact, again using history and multiple cases throughout history as reference point, we learned that overall the impact is negative. We are very dependent on international trade. We were also back in the 1930s one we were negatively impacted. We are more dependent on trade now. As tears that's what tariffs are imposed, to protect your domestic industries, you are trying to discourage purchase of imports. Your imports will decrease affectively. But you will also decrease your export. When you are export dependent region, export dependent nation, that is detrimental. 95% of our consumers are outside of the U.S., we are trying to market and sell to outside foreign markets. You are hurting your export potential. You will see the decrease in exports. We have seen it every single time tariffs are imposed. >>> What are you hearing from local businesses on trade? >> There is great concern. Widespread concern. Because we talked about the amount of steel inputs that are used for local economy. Now with retaliatory actions from Canada, Mexico, the European Union, China, you are talking about a more expanded impact. Now we are talking about an impact on agricultural products. Trade in large will impact your international relationships. As we impact our closest allies and our closest trading partners, we are now impacting a much greater population. It is hard to understand especially when you are justifying these actions based on national security when the most, the highest negative impact is to your military allies. How is that protecting national security ? >>> I have been speaking with Paula Avila vice president of international business affairs with the San Diego regional Chamber of Commerce, thank you. >> Thank you.