Perspective from the 19th Hole is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus to use an image from my favorite sport, golf. Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all my professional positions, including as press secretary in Washington, D.C. for a Democrat Congressman from Oregon (Les AuCoin), as an Oregon state government manager in Salem and Portland, as press secretary for Oregon’s last Republican governor (Vic Atiyeh), and as a private sector lobbyist. This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write. I could have called this blog “Middle Ground,” for that is what I long for in both politics and golf. The middle ground is often where the best public policy decisions lie. And it is where you want to be on a golf course.
I wrote yesterday about the surprise for many Donald Trump voters – higher prices sparked by Trump-tariffs.
Many Trump voters didn’t know what tariffs would mean. They will soon.
Higher prices!
The Washington Post provided a public service yesterday by writing a story outlining where higher prices will strike in “Trump’s trade war.”
Here is a summary:
Cellphones, clothes and household goods
China is the main source of imported consumer goods, sending about $210 billion worth of everyday household items into the United States last year. That means electronics like cellphones, apparel like cotton shirts or shoes and children’s toys could be subject to higher tariffs than they are now.
Industry groups have warned these taxes could increase prices. The Consumer Technology Association, modeling an earlier tariff proposal from Trump, said that smartphones could cost about $213 more.
“There’s very little in [the] consumer electronics space that is not imported,” Best Buy CEO Corie Barry said on the company’s earnings call last week.
Companies making everything from shoes to hardware have already said they plan to pass the cost of higher taxes on to customers.
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Produce, beer and juice
One of the first places shoppers may feel the impact of increased tariffs is in the grocery aisle. The United States imported $9.9 billion worth of vegetables and more than $11 billion worth of fruit and frozen juices from Mexico last year.
“The proposed tariffs would have a significant impact on food prices,” David Ortega, a food economist and professor at Michigan State University, said before the tariffs were officially enacted. Price hikes would come after years of high inflation in grocery aisles, a top concern for Americans in the last election.
The majority of America’s avocado supply comes from Mexico, as well a sizable amount of tequila and most of the imported beer Americans drink. Like many products, Mexican beer is often made in partnership with the United States — using barley from Idaho or Montana, for example.
It wouldn’t be easy to quickly replicate the food supply domestically, Ortega said. Fruit trees, for example, take years to mature. Labor costs are often higher in the United States, and drought and weather could hinder growing.
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Vehicles and car parts
More than half of goods classified as automotive vehicles, parts and engines come from Canada and Mexico. Canada was also the main exporter of industrial supplies to the United States, including building supplies, oil and metal materials used to manufacture other products.
Cars are often made between the United States and its closest neighbors, and parts go back and forth across the border during the manufacturing process.
“There’s no such thing as an American-made car. We have an integrated North American supply chain,” Brusuelas said.
About $173 billion worth of automotive vehicles, parts and engines came from Mexico alone last year.
The proposed tariffs will make it more attractive to manufacture and assemble cars in the United States, said Erik Gordon, a clinical assistant professor of entrepreneurial studies at University of Michigan. He expects car companies might have to readjust their strategy, perhaps making versions of cars with fewer bells and whistles to keep costs under control.
Many other industries also rely on parts and materials made internationally, even if the final product is made in the United States — for example, the country imported $93 billion worth of crude oil from Canada last year.
“There are very few things you could pull apart and say it’s made 100 percent in the U.S.A.,” said KPMG chief economist Diane Swonk.
So, there you have it. Higher prices across-the-board.
I say blame Trump for what occurs. He doesn’t know much about what tariffs do. Neither do those who voted for him.
I only hope we can find a way to survive the next four years.