The Trump administration’s rollercoaster tariffs have brought volatility that wiped out trillions in wealth. Tariffs are particularly tough on small business owners, and that describes almost all businesses in San Diego.
KPBS spoke to Jessica Anderson, interim president and CEO at the San Diego Regional Chamber of Commerce, about the local impact of the White House’s tariff policy.
Jessica, 93% of San Diego county businesses have 12 or fewer employees. What have the tariffs and the threat of more done to these businesses when it comes to planning, orders and pricing?
Anderson: You know, it's the uncertainty that has the biggest impact on our small business community in the San Diego region. The San Diego Regional Chamber, we're the largest chamber on the west coast. We have over 2,000 members, the majority of whom are small businesses. And these tariffs are really a decision between life and death. If you're a small business, think about if you have a lease coming up to extend your business for another year. If you don't have any certainty on what pricing for your products are going to look like, you're not going to be able to extend that lease. So we're really talking about major decisions to our economy and particularly the trickle down effect on our small business community.
The Trump administration has caused some tariffs. However, the tariffs against China have increased. China in fact, has turned around and is retaliating against the United States with its own tariffs. It is targeting American companies, including four in San Diego: Cubic Corp, Source Intelligence, Kratos Defense, Firestorm Labs. Describe the effect of this trade war on these local defense companies.
Anderson: Oh, it's massive. I mean, this has the potential to be truly devastating for our economy as a whole. We're concerned about the auto industry as well. You know, it's the 90-day pause is certainly encouraging, but again, it's following the bouncing ball and that ping pong effect of what's going to come tomorrow. So we're not just concerned about the tariffs on China, we're concerned about tariffs as a whole. Whether it's the auto industry, the construction industry. This will all have a very direct impact on the cost of living for your average San Diegans.
I want to get to that, but before I do, talk to me about what kind of guidance you're offering San Diego businesses.
Anderson: It's very hard to offer any guidance at this point. It's very hard to offer guidance in this era of uncertainty. So what we're focused on is advocacy. We're focused on making sure the Trump administration is hearing directly from our San Diego business community about the direct impacts of these tariffs on, on our binational economy.
So the San Diego Regional Chamber of Commerce just returned from its annual trip to D.C. What did you tell the Trump administration about these tariffs?
Anderson: We told the Trump administration that this has the potential for a huge economic downturn. A recession is potentially coming. We spoke on behalf of our members who are saying they're considering closing, they're considering not buying new products. They're considering significantly tapering down. And most importantly, we have a relationship with Mexico where we're not just trading together, we're producing together. So this is not a tax on just Mexican companies. This is a tax on U.S. businesses and on U.S. companies directly.
And what did the administration say?
Anderson: We've had very positive conversations. They said that they want to hear data, they want to hear the direct stories of companies. And so that's what we're focused on providing. We are here and stand willing to work with the new administration. We're not in attack mode. We're trying to get our message across. That's why we saw advocacy in action with our face-to-face meetings with leaders at our nation's capital just last week.
Consumers are expected to spend up to $4,000 a year more because of these tariffs. They will be spending more on food, wine, cars, the iPhone. So they are pulling back some of that spending. What do you know about how businesses might be preparing for the next round of tariffs after the 90-day pause?
Anderson: Again, they're considering shutting their doors. That's what's so scary here. And in fact, for your average U.S. household, I've heard upwards of $7,600 in terms of an impact in their household spending every single year. And we know that San Diegans are already grappling with the cost of living, with the cost of housing, the cost of groceries. Frankly, this impacts everything. This is a tax on U.S. households.
