-Hello, I'm your host, Brian Callanan.
President Trump's on again, off again tariff policies
are causing upheavals in the world economy,
with trade dependent states like Washington bracing
for major impacts.
-Our country and its taxpayers
have been ripped off for more than 50 years,
but it is not going to happen anymore.
-President Trump called his April announcement
of worldwide tariffs "Liberation Day."
But in a state where two out of every five jobs rely on trade,
legislative leaders are feeling trapped.
-The tariff situation, we're a very trade dependent state.
That has a huge impact,
as you can imagine, for farmers, the agricultural community
and many other sectors all across our state.
-Plus, with the economic instability
of tariffs getting implemented
and then paused within a matter of days,
local workers are afraid their jobs could be on the line.
-So it changes every day.
We don't know what the White House is going to do.
-How is a dizzying array of federal tariff policies
affecting our state's economy, local businesses, and consumers?
-This is causing tremendous reputational damage
to the United States.
Our panel weighs in.
-Half of U.S. wheat passes through our state.
-The biggest enemy of business is uncertainty,
and we are facing a lot of that right now.
-All aboard. We're talking tariffs.
Next on "City Inside Out."
Well, welcome once again to "City Inside Out" here
on the Seattle Channel.
I'm Brian Callanan.
And with me I have a group of people
who are going to help us break down what's happening
with tariffs in our region, starting with Rachel Smith,
the president and CEO
of the Seattle Metro Chamber of Commerce.
-Rachel, good to see you again. -Thanks for having me.
-We also have with us Sam Cho.
He, of course, is a Port of Seattle commissioner.
Sam, good to see you, too. -Thanks for having me.
-And we also have with us Grace Yoo.
She is assistant director of the state Department of Commerce.
Grace, good to have you, too. -Happy to be here.
Thanks. -Let's jump into this.
And, Commissioner Cho, I want to start with you, if I could.
You've been posting a lot about tariffs
on your Instagram profile.
Let me just say the Cho and tell videos
you've been putting together, very, very informative.
Cho me the money. I can't wait for the next installment.
-Cho-time. -Yeah.
Folks, if you haven't seen it, make sure you check this out.
I would like for you to briefly explain to people
what tariffs are,
because I think there's some confusion over that
and why they raise such a concern in our state.
-Yeah. So tariffs are essentially a tax
that we assess at the port of entry
when we import any goods from international countries.
And so when a good comes into our harbors,
the Customs and Border Patrol agents check the manifests
and they assess the tariff based
on what tariff rate the federal government has assigned to it.
The importer is the one who pays the tariff.
And I think that's where the confusion is.
A lot of the rhetoric has been about
China is going to pay the tariffs,
or someone else is going to pay the tariffs.
But the reality is that whoever is bringing the goods
into our ports are the ones paying the tariffs.
And oftentimes those importers then pass that added cost
onto the end consumer,
which is why there's a lot of fear around inflation
as a result of these tariffs. -Got it.
And I just want to make sure I ask this part, too.
Will this push American companies to pull back
on overseas manufacturing?
I've just seen NVIDIA, for example,
a couple days ago saying we're going to invest $500 billion
to build AI chips and supercomputers
entirely in the U.S. which a lot of tariff supporters say, hey,
look, it's working here. How do you respond to that?
-Well, I think it really depends on what type of good
you're talking about, right?
I think a lot of small minority businesses
or medium sized businesses don't have the resources
to build a multi-billion dollar factory, right?
And you have to ask yourselves,
do we really want to bring back T-shirt manufacturing
into the United States, right?
We want high, you know, manufactured goods.
And so the question around
bringing manufacturing back to this country
is not as simple as we're just gonna bring it all back, right?
And so I think there needs there's a more nuanced
and sophisticated conversation that needs to happen.
What jobs do we want to bring here
and what jobs are we better off keeping abroad?
-Got it. Thank you for that. Rachel, let me go to you next,
because we're recording the show in the middle of April.
So we're still within this 90- day pause on worldwide tariffs
that President Trump now has in place.
There's still this baseline 10% tariff from April 5th
for all imports into the U.S.
There are some exceptions for Mexico and Canada.
Bear with me here, folks. China is a major target here.
A lot of people have been talking about this,
a 145% tariff on goods coming from that country.
And then also just before we recorded this show,
a group of five businesses sued the president,
saying he's not authorized to impose any of these tariffs.
I'm saying all this just to point out the fact
that there's a lot to take in here.
I want to figure out what you're hearing about tariffs
from the 2,500-plus businesses that are members of the chamber,
and maybe what you're telling them.
-Absolutely. And, you know, I will say that it is often said
that the biggest enemy of business is uncertainty.
And we are facing a lot of that right now.
Washington is the most trade dependent state in the nation.
So our businesses are particularly impacted,
and they are talking to us a lot about that,
particularly the whiplash that you're talking about,
about announcing tariffs
and then either rescinding them or pausing them.
So to give you a couple of examples,
Amelia Cook, who's co-owner
of Goodwin's Composites in Mount Vernon
that manufactures rods and tubes
for really pretty revolutionary products,
she told us recently
that she is seeing her Canadian customers cancel orders.
Denise Moriguchi from Uwajimaya
says she's looking into new distributors
to try to keep prices down as much as possible.
We also did a survey of some of our members,
and some of the things that we heard
is that they are developing alternative sources
for materials that they use, particularly from Canada,
and then generally diversifying
or trying to diversify their supply chains,
looking at purchasing material that is not yet needed,
but trying to do that now to avoid additional costs
and to keep those things in inventory.
I wouldn't call it hoarding, but trying to be prepared.
And then also things like eliminating,
if you're a restaurant, certain items from your menu,
or slowing down production
so that you can try to better assess the situation.
And, you know, for a company like Tutta Bella,
Joe Fugere is the owner and on the chamber board was just on --
-Been on this station before. -He has indeed.
And I know he was just at a press conference
with Senator Cantwell talking about his experience.
And, again, as the owner of Tutta Bella,
he doesn't want to,
and he also can't change his business model
because he makes Neapolitan style pizzas.
And that necessarily means using products from Italy.
And so I think for a lot of our members,
it's pretty shocking that geopolitics has come
into every aspect of what they're doing,
including at the dinner table.
-Wow. Thank you for all that data.
I appreciate you breaking that down.
Assistant Director Yoo, I want to talk to you about this.
We're talking about a state that's very trade dependent.
Two out of five jobs in our state rely on trade.
Two out of every five jobs here, we have to consider impacts.
Of course, beyond the city of Seattle and the Port of Seattle,
even the west side of Seattle, for that matter.
Can you tell us about how tariffs are affecting us,
will affect us statewide? -Yeah, absolutely.
So 40% of our jobs are tied to trade, right?
What I like to say is the economy is
not made up of dollars.
It's made up of people. Right?
So 40% of jobs means paychecks and bills
for families all throughout the state
and lots of small businesses.
So my job at the Department of Commerce
leads on coordination statewide for trade,
but also small businesses.
And those two are inextricably tied.
Many of our small businesses are the ones
that are going to be hit the hardest by these tariffs.
And when I say small businesses,
they're not only business owners and employers,
but they themselves are the workers.
They're also the consumers.
So they're going to be hit on all sides
by these impacts statewide and across all different industries,
I like to say from aerospace to apples and agriculture.
-Yeah. I'm going to pull apart a few of those issues.
I didn't mean to cut you off there,
but I am going to pull apart a few of those industries
a little bit with you, if I could.
Rachel, can I jump back to you, though?
I wanted to talk about something else here,
because I think it's important
that this tariff discussion affects more than
how goods come to the U.S.
it's affecting tourism, too, and a few other things.
The Seattle Times, you saw this,
reported recently that that big Canadian crowd Seattle
usually sees when the Toronto Blue Jays come to town,
it's happening in May,
doesn't look like it's going to be here
when the Jays play the Mariners.
I just want to focus on Canada for a minute here,
because it feels like we're getting kind of
a double whammy from tariffs.
You have this economic impact
and a blow to what's been a long standing,
friendly relationship.
Tell us about that. -Yeah, absolutely.
And we're working on that to get the Blue Jays fans here
and to really show our neighbors to the North
that they are welcome and that we appreciate them
and that we want to continue our partnership with them.
I sit on the steering committee
for the Cascadia Innovation Corridor,
which is, you know, an effort to really connect B.C., Canada,
Washington State, Seattle and Oregon and Portland.
And that work is alive and strong.
We took a delegation to Vancouver early in March.
And I will say, the things that really stuck out for me,
one was, you know, obviously,
people in Canada are taking the threats to the economy
very, very seriously.
But they're also taking the threats to their sovereignty
very, very seriously.
You know, sort of jokes or things like that
about the 51st state, you know, that that's not funny.
And it's not, you know, they're taking that very seriously.
They also made it very clear to us on that trip
that they understand this is what's happening
at the national level.
They still absolutely want to keep their ties
and continue to work with us here.
And you may have seen that recently,
the Washington State Senate actually did a resolution saying
that they recognizing the value of the relationship.
And just yesterday,
the Vancouver Board of Trade sent a thank you letter back.
So we continue to have that deep relationship.
-Work is going on. Commissioner Cho,
I wanted to go a little bit further with you on this.
As I've confirmed in one of your videos,
Canada is our country's largest business trade partner.
We get a lot of goods there,
including some energy sources
that I'm surprised to hear about there.
Can you tell us about that and how you see our region
and our country affected by tariffs on Canada?
-Yeah. Well, like you said,
Canada remains the biggest trading partner
for the United States.
That has happened because our trade with China
has obviously gone down a lot over the last seven years or so.
And so, you know, I think that the fact
that we continue to wage a trade war
with what's arguably our closest ally in many ways
is very concerning.
But I think what you pointed to, in addition to the tariffs,
let's put the tariffs to a side for a second.
This is causing tremendous reputational damage
to the United States.
You got to understand, international trade, right,
these relationships aren't built overnight.
Trade is not a switch that you can just turn on.
And who wants to do business with a country
that continues to change its policy tone and demeanor
with the rest of the world?
The damage that we're doing
to the United States and our reputation
is going to have an effect
that outlasts the tenure of this president.
Right? And the question will be,
is the United States going to continue
to be a reliable partner?
And if the closest country to us,
both diplomatically and economically,
doesn't trust us and doesn't want to do business with us,
who else is going to be incentivized to do that?
And so the negative impacts of what's happening right now
will reverberate for years to come.
It's not just going to be isolated to this administration.
-Thank you. Assistant Director Yoo, I'll go back to you.
I want to stick with this Canadian theme, if I could.
The state estimates that close to $300 million
in agriculture exports to Canada will be impacted by tariffs.
Wheat farmers in our state
get 90% of their fertilizer from Canada.
I wanted to go down this agricultural path with you here.
As of mid-April, when it comes to Canadian tariffs,
should Washington farmers be concerned?
-Absolutely. Yeah.
So I mean, just looking at previous precedents or history,
right? The previous round of tariffs on apples,
our growers are still recovering from that.
There were hundreds of billions of dollars lost.
There was market share lost.
And just like Commissioner Cho alluded to,
these relationships and the impacts
are incredibly long lasting and they take time to rebuild.
So agriculture is one of our key industries.
They will absolutely, growers will absolutely be impacted.
And even wheat. I learned this recently
from the Washington Council on International Trade.
But half of U.S. wheat passes through our state.
So it's not only going to have impact for our state,
but the nation as a whole.
-And you mentioned that these are farmers
that have suffered during COVID,
and they haven't been made whole yet.
And this is another setback for them.
Is that what you're saying here?
-Yeah. It's just another hit. Yeah.
And that's -- Yeah. -Really important point here,
is that we often talk about trade
within the context of our state.
But Assistant Director Yoo
just pointed out that wheat is a huge export for us.
The Seattle and Tacoma port is a gateway for the Midwest.
A lot of what's grown out in the Midwest is put on trains
and railed to the Seattle-Tacoma harbor
to then be exported. -Right.
-And so we are an extension of and the lifeblood
of a lot of the crops that are being harvested in the Midwest.
And so this isn't just a Washington issue
when it comes to exports.
It really, it crosses the whole country.
-Yeah. And again, just to focus on this
for another point of view,
you don't see this as a situation
where some of those exports could stay here,
and our country could be more reliant
on homegrown products, et cetera.
I think that's part of the reason
that people are in support of tariffs.
-Well, I mean, a lot of farmers re-plant and re-crop.
And for them to not be able to forecast
because of the instability
and or inconsistency of these policies
is really messing with their business.
They don't want to over plant or, you know,
over harvest. That will tank the markets
and create a lot of waste. Right?
And so again, this lack of predictability,
the instability that this is causing,
whether or not you want to assume
that American consumers will consume everything or not,
is the real problem here.
-Okay, Assistant Director Yoo, let me jump back to you,
and I'll switch gears to China, if I could.
I want to get some insight from you
about how the tariffs between our two countries
could have an impact here.
China is the biggest export market for our state,
according to the office of U.S. trade.
$12 billion in exports last year.
But currently, the U.S.
is levying this 145% tariff on Chinese goods.
China has responded with a 125% tariff on U.S. goods.
I just wanted to break down what this means.
I was thinking about a big employer
like Boeing, for example.
You've got parts that are coming in from China for Boeing,
but then they sell planes to China.
Help us out with that thought, please,
focusing on aerospace,
because I think that's a very important part of this.
-Yeah, absolutely. So as you cited, $12 billion, right?
That's 20% of all of our trade worldwide
or exports worldwide last year.
So a huge chunk of our trade activity on aerospace,
advanced manufacturing is a key piece of that industry, right?
And a lifeblood for our state economically.
And the costs on manufacturing,
even bringing it stateside are increasing because the inputs,
the cost of inputs are increasing. Right?
So aerospace is hit hard,
but really manufacturing hits all different sectors
that our state thrives on.
-Got it. Rachel, did you have a thought?
-Yeah. I was just going to say, you know,
China's decision to suspend deliveries of Boeing planes,
it's a travesty on really
kind of every level for a company
that has weathered challenges and is, you know,
getting back finally to full strength for a nation
that relies on that company in terms of national security
and for a state and a region
that benefits from the jobs from that company.
So it, you know, it borders on impossible
to understand how anything
that led to the decision by our trade partners
to take these actions and make these moves
is good for Washingtonians or for Americans.
-Yeah. Commissioner Cho, I want to jump back to you
and just kind of try to figure out some logistics here.
Does this mean Chinese goods will stop coming
to the Port of Seattle, which that would be major,
because that accounts for about 40% of the cargo
for Port of Seattle and Tacoma here.
I'm just trying to figure out,
will shipping companies go to other countries?
What's actually happening to the port physically
because of this battle right now?
-Yeah. So I think in the last round of tariffs
that President Trump put on back in 2018,
we saw a lot of manufacturing and exports kind of
get diverted to other countries. Right? So for instance,
because there were such high tariffs on China,
we saw our business with Vietnam go up a lot. Right?
And so there's been a lot of diversion or transshipments
as a result of those policies.
However the Liberation Day tariffs that were announced
essentially put tariffs on just about every country
that anyone could have diverted to and --
-April 2nd. -That's right.
-They're on pause right now. -Exactly.
And so that basically closes off in many ways that opportunity.
And so like you said, 40% of our containers
at the Port of Seattle and Tacoma come from China.
We already saw a huge dip in 2018
as a result of these tariffs.
And a 145% tariff
is essentially going to make it way worse for us.
And, you know, our port depends on volume for jobs.
-Right. -Those longshoremen out there
get paid to lift containers essentially.
And for us to see a huge dip in volume means
that their jobs and their livelihoods are at stake.
-Rachel, can I get back to you?
I was just talking about this whole idea of a global trade war
we appear to be in right now with China,
how that affects businesses locally.
I'm thinking about maybe homegrown companies
like Nordstrom and Amazon, for example.
How are they impacted? -Yeah, I mean, you know,
we have one giant sort of economic ecosystem
and that's just a reality.
You know, small businesses and large businesses,
you know, large businesses create the volume
of customers for small businesses.
Small businesses create the vibrancy
that make people want to move here,
stay here, work here, start companies here.
But I think, you know, the risk is really just so broad.
So you know the risks include, you know,
upending markets completely,
meaning stock market fluctuations
which impact so many and changes in commodity prices,
things like increased consumer prices.
We've talked a lot about that.
And that can last even when things stabilize,
creating significant business uncertainty.
I started by saying that
as one of the largest enemies of business.
And then, you know, Commissioner Cho mentioned this.
But straining relationships,
slowing down economic activities for some
of our hometown companies who are global,
even though they are hometown.
So, you know, I think importantly, you know,
95% of consumers in the world are not in the United States.
And so these tariffs are literally
choking us off from literally,
you know, the entire global market almost.
-Yeah. Commissioner Cho, I want to keep going along this path of
how tariffs affect consumers, if I could.
It's not hard to follow the logic
that if businesses are paying higher prices
to import the goods they need to build their products,
we're going to see some higher prices.
What are you tracking in terms of rising costs right now?
Is there anything the Port of Seattle can do about that?
-Yeah. So I think what we will likely see because of
the 90-day pause is a lot of shippers
will try to do what's front loading,
and that is essentially shipping everything
you need ahead of when the date of the tariff
is going into effect.
I think this 90-day pause is going to cause a frenzy
in the shipping industry,
because those large Amazons and the Nordstroms of the world
will try to get a lot of their goods to the US
before the 90-day pause, you know, evaporates.
That's going to potentially cause congestion
at ports similar to what we saw during the COVID-19 pandemic.
And so we're monitoring that very closely.
In fact, I'll be traveling to Asia at the end of the month
to talk to our shippers and get a sense
and a forecast of what they're expecting to see.
We import a lot of autos here in the northwest,
Hyundais and Kias, over the last two years.
The 25% tariff on autos
are really causing the automakers to rethink
their strategy around
whether or not they're going to send finished vehicles here.
And so we need to have these conversations.
We are more focused on talking to our trade partners
and our shippers
to get a sense of what we can expect
over the next three months,
so that we at the port side can be prepared,
making sure that containers aren't stuck
at the terminals like they were during the pandemic,
making sure that they clear customs efficiently and quickly.
Making sure that the entire supply chain,
whether it's the truckers or the warehouse
workers are all lined up to handle that volume.
-Thank you. And, Assistant Director Yoo,
I want to go back to you
and talk about a point that Rachel brought up,
just this whole idea of the seesawing activity
on the stock market that we're seeing right now.
I'm looking at this consumer perspective,
and I think that translates into more uncertainty
as we're talking about and maybe less purchasing,
maybe people not taking out loans for homes or cars.
How much of a concern is it at a state level
that we have this kind of economic instability here,
this consumer spending, a lack of consumer confidence,
maybe, and maybe even the health of some
of our major public companies here at stake.
What do you think about that?
-Yeah, I absolutely agree with what Rachel said earlier.
It's one thing to be concerned about the actual costs
these tariffs are driving,
but the general climate of uncertainty and fear
and bracing yourselves
that's impacting both businesses and their strategies,
not only for this year but beyond, but also consumers.
Right? And it's just not great for the economy,
for people to be operating under that lack of understanding of
how they're going to plan for their family spending
all the way to their businesses spending.
-And I need to start wrapping up here.
And, Assistant Director Yoo, I want to start with you.
I'm trying to figure out what the state is doing
or what resources might be available for people
during these very uncertain times.
What can you tell us?
-Yeah. So the state just launched last week,
our tariff resource and information guide
on the Department of Commerce's website.
That's going to be our one stop shop landing page
to keep Washington businesses, as well as consumers,
aware of all of the changes that are afoot.
Because let's be honest, this is a very evolving situation.
So the rules of the game are constantly shifting as well.
So first of all, it's information that can be helpful
to navigate but also resources.
So everything from a build my export plan tool online
to one on one coaching with my small business exports
and assistance team to provide that customized planning
that businesses need to navigate
these challenging times are all available on that website.
I also have to put in a plug for a great webinar
that's coming up. We're partnering
with the Washington State Export Finance Assistance,
Finance Assistance Center of Washington for a webinar
on April 22nd
where businesses, anyone can tune in from the public.
Just register, ask, bring your questions
and this will be the first of many touchpoints.
-Okay. Thank you for that. Rachel,
anything you're pushing our lawmakers to do
to fight back here? I know you talked about connecting
with Senator Cantwell here.
Is there anything they can do?
Where are you going with this? -Yeah, I mean, absolutely,
we continue to do advocacy at all levels of government,
including the federal government.
And, you know, we have champions in our congressional delegation.
So I think anybody who wants to reach out
and support the efforts that they are engaged in,
I know they would appreciate that
and to just continue to use your voice.
And we have opportunities for people to do that
by getting involved in the chamber.
We also are putting on webinars,
and we connect people to some of the great resources
that our partners are making available.
So, you know, now is a time, I think,
for our members to use their voice to do that outreach
and we will advocate on their behalf.
-Got it. Commissioner Cho, I'll let you wrap up.
I know you were talking with Senator Cantwell
as well just before we had this connection here.
I'm trying to get that bigger picture here of
how does our region mitigate what appears
to be an unfolding global trade war?
-Well, I think in times like these,
you really just need to keep up with the news.
It seems like this administration,
you know, kind of pivots on their policy left and right
day to day, but also --
-By hour sometimes. -By hour sometimes.
Yeah. That's right. But also advocate.
You know, I think the vast majority
of business owners and consumers
who are going to feel it in their pockets
or in their margins need to make sure
that this administration understands the real impacts
that this are having both on business owners
but also everyday people.
And that includes talking to
your congressional representatives
and advocating and telling your stories.
I think, you know, again, you know, as Assistant Director Yoo
said that the economy is made up of people,
and it's the people who drive the economy.
And so to the extent
that we can tell and articulate how this,
how these policies are affecting real people is going to help,
you know, move the needle a little bit.
And I think you've seen that a little bit
with the capitulation around the 90 day,
you know, Liberation Day policies.
You've seen you've seen how much of the outcry
has started to influence this administration.
-Right. Thank you for that. And we will be right back.
What are people saying on social media about
how President Trump's tariffs are affecting us locally?
One person writes, "Across the board
tariffs that Trump proposes
offer no strategic advantage to Washington state
and will just raise prices for Washington residents
and hurt our exporters and small businesses."
Another person comments,
"Forcing a level playing field is something
no one else has had the will to attempt.
Trump is actually trying."
We'd like to know what you think.
Send us an email at contact@seattlechannel.org
or find us on social media.
Good to have that input.
And a big thanks to Assistant Director
of the Department of Commerce Grace Yoo,
Sam Cho from the Port of Seattle,
the commissioner there,
and Rachel Smith of the Seattle Metro Chamber.
I really appreciate you being here.
Thank you. -Thank you.
-And we will see you next time on "City Inside Out."