San Diego

San Diego companies brace for impact of President Trump's tariff plan

The Otay Mesa and San Diego Regional Chamber of Commerce both said they are concerned tariffs will significantly damage our region’s cross-border economy

NBC Universal, Inc.

President Donald Trump on Saturday announced the signing of a series of executive orders to impose tariffs on imports from Mexico, Canada, and China, and San Diego businesses say they are bracing for the impact.

Trump declared an economic emergency to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada. Trump’s order includes a mechanism to escalate the rates charged by the U.S. against retaliation by the other countries, raising the specter of an even more severe economic disruption.

Both Mexico and Canada have already ordered retaliatory tariffs. China did not immediately respond to Trump’s action. The tariffs will go into effect on Tuesday.

Efrain Ramos, the manager of LiVa Market in Spring Valley, said 60% of the market's products are imported from Mexico.

“It’s a lot. A 25% tariff would be a significant impact on our goods,” Ramos said.  “If the prices go up, we may lose customers.”

Tariffs are paid by companies importing goods into the U.S., similar to a tax. A range of businesses from homebuilders to alcohol producers warned of the negative economic impact the tariffs would have for businesses and consumers following the tariff announcement. 

Companies will have to decide whether to pass these higher costs to consumers or absorb them, which would dent profits or require cuts to protect their margins. The implications could be wide-reaching across the U.S. economy, in part because American consumers and businesses imported more goods from Mexico than any other country.

The Otay Mesa and San Diego Regional chambers of commerce both said their organizations are concerned tariffs will significantly damage the San Diego County region’s cross-border economy.

Alejandra Mier y Teran, the executive director for the Otay Mesa Chamber of Commerce, said the San Diego region relies heavily on cross-border trade and the ramifications of Trump's tariff plan could be "devastating."

More than $50 billion in goods go through the Otay Mesa Port of Entry south of San Diego every year.

“How much of these will we lose? Will be diverted? Companies will close? We don’t know.”

Mier y Teran said 90% of the Otay Mesa Chamber of Commerce's 40,000 employees are servicing trade, mainly imports. Mier y Teran anticipates many of their Otay businesses will have to cut back jobs in an effort to survive.

“Tariffs have an impact on not just the consumers who will bear the price, but also job losses, basically a lot of these businesses will not be able to tolerate that additional price hike and they make close,” she said.

Last November, NBC 7 spoke with Luz Maria, owner of El Comal, an authentic Mexican restaurant in North Park. She expressed similar concerns with President Trump's then-campaign promise for tariffs on Mexico.

“The tariffs would really hurt small businesses like ours because we largely rely on Mexican-imported goods, avocados for instance, which we buy from Mexico. It will make it very, very hard on us,” she said.

Among the products coming from Canada that will receive a tariff is a fertilizer called 'Potash," which is commonly used by farmers. NBC 7's Adonis Albright spoke with local farmers about the impact these tariffs could potentially have on their business.

At the Hillcrest farmers market on Sunday, though, local farmers did not believe Trump's tariff plan would have an effect on them, even though a commonly used fertilizer called Potash is one of Canada's main exports to the U.S.

"Everything is local from us," said Michael Clark, farm manager for J.R. Organics.
"We're supplying all our chains here as far as our products that we use, our materials for the soil."

Clark said it's likely Potash is used by bigger agricultural farmers, not the ones you'd see at your local farmer's market. But that could mean rising prices on goods at national chain supermarkets.

The San Diego Regional Chamber of Commerce said in a statement that it opposes the President’s executive order.

“Taxing imports is a tax on American Businesses and U.S. Customers, the end users of these products. Instead, we urge the administration to strengthen our relationship with our allies, business partners, and North American neighbors," the statement said, in part.

Adonis Albright, the Associated Press and NBC News contributed to this report.

Contact Us