As I mentioned earlier, we are witnessing uncertain times. And that uncertainty affects our state budget, our local businesses, and potentially your pocketbook.
Some constituents wrote me after last week’s newsletter to criticize my “Trump-bashing.” But criticizing the new administration is not my intent here. Explaining what is going on to you is. And I provide links back to every article I reference.
President Donald Trump declared a 25% tariff on Canada, Mexico, and China last Saturday, potentially starting a trade war that would likely lead to price increases on groceries and numerous other products. These tariffs, he said, were justified as a response to “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” constituting a national emergency under the International Emergency Economic Powers Act (IEEPA).
The president said later Friday that he wasn’t using the tariffs as a negotiating tool, but as a way to raise revenue for the federal government and bring attention to fentanyl flowing into the country.
The U.S. Department of Agriculture’s Economic Research Service writes on its website that Canada and Mexico “are the United States’ first and third largest suppliers of agricultural products averaging $30.9 billion and $25.5 billion in 2017–21, respectively. “Mexico supplied the United States with 31 percent of imported horticultural products including fruit, vegetables, and alcoholic beverages. Canada is also a source of horticultural products, as well as grains, and meats.”
The Office of the United States Trade Representative writes on its website that the U.S. imported $562.9 billion worth of goods from China in 2022.
Mexico and Canada both reached a deal to pause impending tariffs until at least early March. On Tuesday morning, a 10% import tax on all items from China went into effect.
How does this affect Oregon business? “Businesses do not like uncertainty,” Carl Riccadonna, Oregon’s Chief Economist, told OPB. “They do not like to be playing a game where the rules of the game are in flux, and they have to make these adjustments to supply chains and investment patterns.”
In Oregon, industries like agriculture, construction technology, and computer chip manufacturing rely on international trade. In 2023, the state exported more than $25 billion worth of goods to the global market and imported nearly $20 billion, according to the trade group Oregon Business & Industry. “The escalation of a tariff or trade war — particularly with major trading partners like China — could negatively impact Oregon’s key exports, such as timber, wheat, wine, and hazelnuts,” the economists at Oregon’s Office of Economic Analysis wrote in their most recent quarterly outlook.
The biggest exports from Oregon are computers and electronics, transportation equipment, machinery, chemicals, as well as agriculture – all supporting roughly 90,000 jobs at places like Nike and Intel. |