How Trump’s Trade Deals Could Impact Jobs, Prices and Inflation
57:51 Share

Summer's here and Nordstrom has everything you need for your best dress season ever. From beach days and weddings to weekend getaways and your everyday wardrobe. Discover stylish options under $100 from tons of your favorite brands like Mango, Skims, Princess Polly and Madewell. It's easy too with free shipping and free returns. In-store order pickup and more. Shop today in stores online at nordstrom.com or download the Nordstrom app.

With a Venmo debit card, you can Venmo more than just your friends. You can use your balance in so many ways. You can Venmo everything. Need gas? You can Venmo this. How about snacks? You can Venmo that. Your favorite band's merch? You can Venmo this. Or their next show? You can Venmo that. Visit venmo.me slash debit to learn more. You can Venmo this, or you can Venmo that. You can Venmo this, or you can Venmo that.

The Venmo MasterCard is issued by the Bancorp Bank, and a pursuant to license by MasterCard International Incorporated card may be used everywhere MasterCard is accepted. Venmo purchase restrictions apply. From KQED. From KQED in San Francisco, I'm Alexis Madrigal. Remember tariffs? Yes, despite so much back and forth, up and down by the Trump administration, new tariffs are being negotiated between the U.S. and China.

These are title forces, you know, it really matters for everyday businesses and people if tariffs are 45 percent or 20 percent or 125 percent. So we've got some experts with us to talk with us about what's happening with the tariffs. Did they change the American economy? Are we still bracing for impact? What's going on here? We'll find out right after this news.

Welcome to Forum. I'm Alexis Madrigal. Global trade is confusing. Supply chains are opaque and now the Trump administration has been playing on again, off again with tariffs on traditional trading partners, geopolitical allies, and the whole EU. The Trump administration says it has or is negotiating deals with countries, but much of what's actually happening remains unclear.

The focus for us this morning is on the latest negotiations with China and here to help us sort through what's happening and how the tariffs are affecting regular people. We're joined by Kevin Truong, business editor at the San Francisco Standard. Welcome, Kevin. Thank you for having me. And we've got David Goldman, executive editor with CNN Business. Welcome, David. Hi, how are you? Yeah, great. Thanks for joining us.

Davis, why don't you help us catch up a little bit? The Trump campaign obviously was big on tariffs, came in and started to make some changes. What's happened really since he came to office?

Right. This shouldn't be a surprise to anyone because this is exactly what President Trump had campaigned on. The surprise was after he won the election, he started to say that he was going to do much more severe tariffs than we had initially expected. So in December, he talked about putting as high as a 60% tariff on China. He talked about 25% tariffs on Mexico and Canada. And

That really set the markets on their back foot. They didn't really understand what it was that Trump could do and was going to do. And when he took office, it became clear pretty quickly that he was going to start implementing tariffs.

on a much more aggressive basis than even what he said in December. And so since then, we've seen 25% tariffs on China. I'm sorry, 25% tariffs on Canada and Mexico. We've seen as high as 145% tariffs

on goods coming in from China. We've seen 25% tariffs on steel and aluminum that went up to 50% recently, 25% on copper and he's threatened lumber and other items as well. And that is on top of the 10% universal tariff that he put in place on that so-called liberation day

And there are some paused tariffs as well on autos, auto parts and things like that. And also, you know, tariffs that go as high as 50 percent on a number of countries throughout the world. So there are a number of different angles and policies that the Trump administration has taken here. And it really has, to many degrees, shocked Wall Street.

It's interesting because if you've been watching the stock market, you wouldn't really know that there were these massive changes to the global economy. There was like that one week when things kind of went a little wild and then, I don't know, things kind of popped back to normal. It has seemed to me like the markets are kind of discounting that there'll be any major change in the actual global economy.

Well, that's because of something that has colloquially been known as "taco," which is Trump always chickens out. And there is some good history here where some of the worst, or I shouldn't say worst, but the most aggressive policies that the Trump administration has threatened have been paused or rescinded. And so those are things like auto tariffs on domestic automakers or the 145% tariff on all Chinese goods that was in place.

or some of those reciprocal tariffs that were announced on April 2nd. So some of those policies have been pulled back. And so we were in momentarily in a bear market. We didn't close in a bear market, but we were down about 20% from an all-time high that we reached last year.

in mid-February. So that, you know, in early April, we had fallen by a fifth from that. And that's a very severe reaction. Since then, we have gained pretty much all of that back. And the reason is because the market has come to understand that Trump is looking here for deals or he's looking for, you know, potentially

some ways out that might not affect the markets and the economy to the degree that they had feared.

So to the extent that we can know the answer to this, do you think this is kind of court dynamics where somebody who really wants tariffs within the Trump administration gains sway over the president for a while and then he puts those in place and then somebody else gains sway and he pulls them back? Do you see it as part of that particular actors outside the administration, like, say, the bond market or other people like that had been able to

shock the president into pulling tariffs back? Like, what's driving what feels to me like a pretty chaotic policy?

Well, we know that Trump wants four different things from his tariff policies. We know that he wants to rebuild American manufacturing. He wants to restore the balance of trade because America imports a lot more goods than it exports. He wants to raise revenue so that he can do things like the domestic policy agenda that's going to cost a lot of money.

And he also wants to prevent things like fentanyl from coming over the border. And so he has set out to do those four things. The problem with that strategy is that you can't really do all four at the same time. For example,

If you want to restore American manufacturing, well, once that's restored, no one is going to buy foreign products. They're going to buy American products. That's the whole point, right? And so where is the revenue coming from to pay down the debt and to get these big policy agendas implemented?

And so what Trump has found is that when certain aspects of the market react in one way or another, like the bond market, which he said was getting a little yippy in April, he'll pull back a little bit. Or if he sees that there's progress on a deal that he can make to get some of the aspects done that he wants to get done, he'll do that.

And so one example of that was the UK deal where he found that the UK was willing to open up its market to some agricultural products that they didn't allow from the United States.

And Trump was willing to, you know, take a bet that if he lowered tariffs on the UK, that he could open up a market to some American products there. So there are a number of things that are driving this policy. It's interesting because one of the big sticking points, it seems like with China right now are this, you know, export controls going both ways. The U.S. refusing to allow American companies to export some products.

chips that are used in artificial intelligence largely produced by Nvidia and other companies. And then on the Chinese side, Chinese export controls on rare earth magnets, which are used in a variety of things, but in particular, you know, say in fighter jets and other parts of our military manufacturing. Where does that fit in, in this kind of the four legs of this stool that you've laid out there? Or is that another sort of goal of this policy set?

Well, certainly the Trump administration, the first Trump administration set out to undo a lot of what they had viewed as unfair trade practices between the United States and China. And that was actually continued by the Biden administration so that, you know, we weren't exporting critical AI chips that can do these amazing things in artificial intelligence.

We stopped exporting other critical technologies that we viewed were of national security import. And China, in turn, has started scrutinizing American businesses that do business in China more. And when things got really, really tough between the U.S. and China in April, where we had that 145% taxing,

tariff that effectively stopped all goods coming out of China into the United States, China said, you know, you don't have the only Trump card here. We have a Trump card. And that's the fact that 98% of rare earth minerals that come into the United States come out of China.

And so as you said, basically everything that goes beep, any kind of electronics, cars, jet engines, military equipment needs rare earth minerals and we get those from China. And so that was what kind of brought the two groups back to the table after their initial Geneva Convention last month. They met in the UK a couple

weeks ago, they sought to get that deal done. And last week, we saw that they had agreed on a framework to get the initial agreement done. And China said that any US company, this is according to the Trump administration, any US company that wants rare earth minerals will be immediately approved. We'll see if that actually happens. But that's where we are right now.

Kevin Truong, business editor with the San Francisco Standard. You've been listening to Dave Goldman describe these different global dynamics. How are local companies navigating all these changes? Well, I think from the perspective of a local entrepreneur, a small business owner, you

Trade experts, macroeconomic policy professors can't even figure out what's going to be happening on a week-to-week basis, let alone if you're trying to run business on a week-to-week basis, if you're just trying to sell your goods. I had one local manufacturer tell me he had to resort to downloading Truth Social. That was basically his strategy.

Bloomberg terminal, if you will, because that was where he was getting the most up to date trade policy directly from President Trump. So a lot of small businesses I'm talking to are basically in what I would call a tariff purgatory. They're not sure if even this framework of a deal, as David mentioned, is the thing that will persist. And whether this 55% number, which has been put forward by the Trump administration, but not

necessarily confirmed by the Chinese side will be the number that actually goes into effect. So they're really working in a kind of a known, unknown or unknown, unknown scenario where a lot of them are hoarding products. A lot of them are trying to raise prices in China.

in advance of potential terrorists, but they're working in really a black box coming from the Trump administration and the conversations happening between the two countries.

We're talking about the Trump administration's current tariff deals, what they could mean for jobs, for companies, for prices, inflation. Joined by Kevin Tronk, business editor with the San Francisco Standard and David Goldman, executive editor of CNN Business. Of course, we'd love to hear from you. Maybe you own a business and you've been affected by these tariffs or the uncertainty around the tariffs. Maybe as a consumer, you've noticed things changing. Give us a call. The number is 866-733-6786. That's

866-733-6786. You know where you can email things. That's to forum at kqed.org. We'd love to hear about your situation. You can find us on social media, Blue Sky, Instagram, etc. We're KQED Forum. And of course, there's the Discord community. I'm Alexis Madrigal. Stay tuned for more right after the break.

Support for Forum comes from the University of San Francisco School of Management. Celebrating 100 years of partnership with the Bay Area business community, the USF School of Management connects students to the city's vibrant culture, hands-on internships, and a wealth of career opportunities.

where AI and sustainability are integrated into every facet of business education, and where students bring innovation, ethics, and entrepreneurial leadership to a planet in need. The University of San Francisco School of Management. Change the world from here. Support for KQED Podcasts comes from Earthjustice. As a national legal nonprofit, Earthjustice has more than 200 full-time lawyers who fight for a healthy environment.

They wield the power of the law to protect people's health, preserve magnificent places and wildlife, and advance clean energy to combat climate change. Earthjustice fights in court because the Earth needs a good lawyer. Learn more about how you can get involved and become a supporter at earthjustice.org.

Welcome back to Forum. Alexis Madrigal here. We're talking about the Trump administration's current tariff deals, what they could mean for jobs, prices, inflation, local companies. Turned by David Goldman, executive editor of CNN Business and Kevin Truong, business editor with the San Francisco Standard. Kevin, you said before the break that we're in this space of tariff purgatory, where at least the nominal number is that the tariffs on Chinese goods could be 55%.

That's a lot, right? I mean, you know, we have not had tariffs this high for quite some time. If you're a Bay Area business, that feels like quite an increase of your sort of intermediate goods costs or your raw goods costs. Yeah, that's even at that 55% number, which is fantastic.

far lower than the 145% number that David mentioned earlier, that essentially amounted to a trade embargo. That is enough to really shake up all of your financial modeling, your pricing predictions. I was talking to one company who was basically all ready to launch a new product, and then the tariffs came in, and they had to basically figure out what the market would bear in terms of the new pricing and what folks would

even be willing to pay. And they sort of worked out this deal to give folks a kind of a pre-order discount. And if the tariff situation improves, they will give them a rebate. But that's all stuff that's happening in the last minute. And this was a product that was millions of dollars, multiple years, multiple people, you know, dozens of people working on the research and development of this. And, you know, basically with a true social post and a couple of

conversations that all really shook up. So yeah, folks are even at that 55% number, which is much reduced. It really shakes up a lot of the ways that people are doing business, thinking about doing business and being able to pass along those prices or those price increases to their customers. David Goldman, I wanted to come back to you on

Something that we've heard from our listeners when we've done trade and tariff shows in the past is that

They see or at least some of our listeners have seen these tariffs as a way of kind of personalizing the US economy like allowing for particular companies to cut a deal directly with the Trump administration to be exempted from some of these tariffs channeling more power through the Trump administration Do you see that as part of what's happening here? And where do we see that kind of deal? occurring

The clearest example of that was in April, we saw an exclusion of electronics coming out of China from those massive tariffs. And that was right after Apple CEO Tim Cook had met one-on-one with Apple.

And so it wasn't clear from the Apple side that that was a direct request until Trump said that part out loud and said that this was a direct result of being asked. There are big companies that can do that.

Really difficult maneuvers in the supply chain lobby the Trump administration to get out from under some of the worst, in their view, tariffs, the most punishing tariffs for their bottom lines.

If you're a small business like Kevin was talking about, well, that's really, really hard to do. I mean you could be confronted with a $200,000 tariff bill that's coming off a boat and you got to figure out how to pay for that. That's not easy. It's not like they're Apple and they can –

start shipping iPhones bound for the United States out of India to avoid the large tariffs. So, yeah, this is a big, big concern for big business and small business. But at least if you're a big business, you potentially have a bigger chance of getting a deal done. Let's bring in a fascinating story from a small business owner here. Let's bring in Justine in Novato.

Hi. Thanks for taking my call. So this is interesting. I bought a horse in Denmark. I'm a small business. I import horses from Europe. I've been doing this for over 20 years. I have never had a tariff on a horse. All of a sudden, President Trump put a 50% tariff on a horse. I was...

in contact with custom brokers and with the quarantine at LAX. And a horse was being shipped in and it was over $200,000 and they got ahead with over a $50,000 tariff. I spoke to my customs broker and they said,

don't import the horse because Trump will probably waffle on this whole thing, which is exactly what happened. So I waited. I am now currently, as a matter of fact, she's in transport right now to Frankfurt.

fly over. I have been frantically working with my customs broker to get the paperwork together, and I will be paying for the first time a 10% tariff on a horse. And we were frantically trying to get this done before, I think, what is it, July 9th? It's supposed to go back up to 50%.

Justine, he wants you to make horses here in America. I mean, that's the thing. I mean, I don't think people really understand. Like somebody like me who people don't hear about or think about, I'm a small business. That 10% truly affects me in terms of the resale of a horse. And that's not a small amount of money at all. Are you going to eat it or are you going to raise the price of the horse?

As of right now, my major concern is just getting the horse over here. I'm panicked that he's going to decide in the next couple days to put the tariff back up. And then the customs brokers have to do whatever the tariff is.

So she flies in on Wednesday and then she goes through customs on Wednesday. I'm just trying to get through Wednesday. That's all. And at that point, we will decide because at that point, I have to then get the horse through quarantine, which is 21 days. And then I have to bring her up, which is my time and money. And then we go from there. And then on top of it, I may have to pay a VAT tax.

because she's been delayed and and shipping because of the fifty percent care if that was originally put on

Wow. Justine, totally fascinating. I mean, with your story, A, just I wasn't aware of the horse import business. But B, Kevin Truong really points out like there are so many small businesses and in a global economy in which everything is interconnected, including the Danish horse breeding industry and the Bay Area horse importing industry.

Like, you know, slapping 10 or 25 or 55, you know, these things matter to a bunch of individual businesses. Where can we see that showing up? Like, is it just...

In the anecdotes of the manufacturer you talked about or Justine's business, or are we starting to see this in some kind of statistics that allow us to say like, oh, this is changing the shape of the economy? Well, you can see it kind of a couple blocks away from the studio at a local Banh Mi place that posted literally a tariff guide on all the products that they're seeing their distributors and importers raise prices on and as an explanation on why they're raising prices.

Prices across the board, 9%. We're starting to see some impact on inflation numbers, although a lot of companies, almost in preparation for what they saw as the tariffs coming down, started to front load a lot of shipments. So we're seeing reports of actually some products for Halloween already being shipped ahead of time to get ready for that holiday season. I mean, I think...

you know, what we're also seeing is the use of some

strategies to avoid paying the tariffs. So a few companies I spoke to talked about using what's called bonded warehouses. Essentially, this allows you to bring the products in stateside, but you don't actually pay the tariffs until you take it out of the warehouse. And that allows you to time it a little bit better. Now, in Justine's case, I don't know if the bonded warehouses also have stables, but it kind of allows them to be a little bit more flexible with the ups and downs of

the tariff policies that are coming down from the federal administration. You know, David, similar question to you about, are we seeing delayed effects because of the sort of dynamism of business people who figure out how to minimize their tariff costs? Or is it really just that the effects of this are somehow more muted than were anticipated at various times over the last couple months?

Well, we aren't really seeing the kind of inflation and job loss and economic destruction that most economists, most mainstream economists had thought we would by this point. Now, there are a few factors for why that is the case. One is to your point that a lot of the most aggressive tariff policies have been delayed.

It is also true that in addition to the kind of bonded warehouses and other kind of creative ways that companies can get around the tariffs, they are taking advantage of that. So one of the things that they're doing is you can call it hoarding basically. They're just stockpiling as many goods as they could. And in fact, that is one of the critical reasons why the US economy –

contracted in the first quarter because so many businesses trying to get out from under tariffs brought as much stuff as they could into the United States ahead of time that it had this negative effect on the overall economy. But

Every economist that got that wrong and thought that we would be in this state right now has said, well, just wait a couple months. Just wait a few more months and you're going to start to see these effects. We'll see if that's true. But so far, the only place that we've seen that is in the survey data where you and I and other consumers get to take these surveys done by the University of Michigan and the conference board and they say –

that they're really upset. In fact, we had the second lowest reading ever from the University of Michigan's Consumer Sentiment Report last month. So that generally translates into when you have people who are upset, they don't pay to go buy stuff, and because the US economy is made up two-thirds of consumer spending,

that's when you can start to see that kind of contraction happening. But that's not happening just yet. That's so interesting. We're talking about the Trump administration's current tariff policies and the uncertainty there. We're joined by David Goldman, executive editor of CNN Business and Kevin Tronk, business editor with the San Francisco Standard. We want to hear from you, of course. What tariffs are you watching? Are you a small business person?

who has some skin in this game. You can give us a call. The number is 866-733-6786. That's 866-733-6786. You can email your questions or your stories to forum at kqed.org as well. Let's get another one of these. Jenny in Sonoma, welcome.

Hi, thank you so much for taking my call. I have a small business. We've been in the Bay Area for nearly 20 years. It's a sustainable business and we import most of our products from Europe because they have really strict sustainability protocols. All of our products are made to order, which is part of the sustainability model, so we really don't stock a lot. And oftentimes production is eight to ten weeks.

So what we've experienced is we are getting hit with tariff fees on products that we sold to customers in January, way before the Trump administration was even in place. And oftentimes our margins on these products are 20%. So a 10% tariff actually eats into half of our margins.

And so what we're seeing around us is that we can't predict the sales in the future for any of our clients. We've had to hold back on selling certain products. We've had to create notations that we will pass on tariff fees because they're so unpredictable. And we're seeing small businesses like ours close because you can't predict the margins on products like this.

With a business like ours that's already suffering from COVID and the effects of a really struggling brick-and-mortar retail market, this is really, in a lot of ways, the nail in the coffin for a small business like ours that really can't sustain additional losses.

Yeah, what are we talking about here? Are we talking about like towels? Like what kind of sustainable goods, just so people have a sense of it? Rugs, sofas, tables, so like high value items. Oh man, so complex. And so have you had any shipments that have sort of gotten caught along the way in this sort of changing tariff environment?

What we've seen is we've had products that we've sold at a certain price to a customer, and when it comes through customs, it doesn't get caught. But the customs fees vary, and it depends on where it's being made. So let's say a product is being made in Denmark, and it comes to customs. It's a 10% fee on a $15,000 sale. You know, that's a significant amount of money. And in some cases, customers who have paid for this product

product back in let's say December they don't understand why they would have to pay for something like that right because it wasn't even a part of the conversation so we as a small business are oftentimes eating that cost in order to deliver the product to the customer yeah yeah Jenny thanks for thanks for sharing your story appreciate just hearing hearing all these different effects here on our local business owners and

I wanted to bring in another voice who might have some thoughts here. Sid Malady is CEO and founder of Nuvo, which helps in the sort of logistics world. Thanks for joining us, Sid. Thanks for having me.

One of the reasons we wanted to have you on the show is that, you know, we're getting these stories from, you know, individual businesses. We've seen it in Kevin's reporting, you know, across the region. And yet, you know, as David was noting, we're not really seeing these things show up in the numbers on the U.S. economy. You're obviously working with a ton of different businesses. So what do you think is going on?

Yeah, well, we're seeing some interesting activities happening in the macro environment. For instance, you know, if you're a small retail business that's selling goods that have been procured from

other international markets, we're starting to see the volatility impact of the tariffs regime starting to hit. And I think this will materialize and show up in the data, but it's going to be a lagging indicator. The pain hits first and early. The numbers reflect this impact thereafter. So just a couple of things that we've been seeing, activities on our platforms and in my conversations with finance and sales leaders and manufacturing, distribution, retail,

We're seeing a few things happen in response to the tariff regime and the volatility associated with it. First and foremost, I think the tariff impact is causing volatility in costs. So what that leads to is a lot of businesses are either asking themselves, should we pass on these increased costs to our end customers? And in many cases, they are. The price of everyday goods are starting to go up.

But as we know, in many segments of our economy, there is price elasticity. If you increase the price of something by 20%, then there's less demand for that good.

So the overall revenue that an average business is able to generate is, you know, either flat or going down. Alternatively, we're seeing margin compression where there is, you know, a lot of businesses are struggling for imported goods to fly off the shelves at lower margin. So there's an exploration of is there a shifting product mix that will allow us to compensate for some of the margins we need to make on other products that can be, for instance, domestically sourced from trade partners within the U.S.?

The answer isn't always yes, so it's difficult. And then the final dynamic that we're seeing is oftentimes businesses that are very cash flow crunched that are seeing a lot of impact on the revenue side of their business are starting to renegotiate terms with their suppliers.

So maybe you initially negotiated 30 days to pay off invoices on procured goods, but now a lot of businesses faced with no other option are starting to negotiate 60 or 90 day terms so that they're using their vendors as kind of a cash flow buffer to keep their heads above the water. So there are a lot of ripple effects that we're ultimately seeing as a result of the Tariff Subpact. Mm-hmm.

We're talking about the Trump administration's current tariff deals, what they could mean for jobs, prices, inflation, local companies, local product mixes. We're joined by Sid Malati, who is CEO and founder of Nuvo, David Goldman, executive editor with CNN Business, and Kevin Trong, business editor with the San Francisco Standard. We're also taking your stories of the way that these tariffs are used.

maybe affected your business or your life, you can give us a call. The number is 866-733-6786. Really helpful for listeners, I think, to get those stories. 866-733-6786. You can email forum at kqed.org or find us on social media. I'm Alexis Madrigal. Stay tuned for more right after the break.

Support for Forum comes from the University of San Francisco School of Management. Celebrating 100 years of partnership with the Bay Area business community, the USF School of Management connects students to the city's vibrant culture, hands-on internships, and a wealth of career opportunities.

where AI and sustainability are integrated into every facet of business education, and where students bring innovation, ethics, and entrepreneurial leadership to a planet in need.

The University of San Francisco School of Management. Change the world from here. Greetings, Boomtown. The Xfinity Wi-Fi is booming! Xfinity combines the power of internet and mobile. So we've all got lightning fast speeds at home and on the go. That's where our producers got the idea to mash our radio shows together.

Through June 23rd, new customers can get 400 megabit Xfinity Internet and get one unlimited mobile line included, all for $40 a month for one year. Visit Xfinity.com to learn more. With paperless billing and auto-pay with store bank account, restrictions apply. Xfinity Internet required. Texas fees extra. After one year, rate increases to $110 a month. After two years, regular rates apply. Actual speeds vary.

Welcome back to Forum. Alexis Madrigal here. We're talking about tariffs. Joined by Sid Miladi, CEO and founder of Nuvo. We've got David Goldman, executive editor of CNN Business, and Kevin Truong, business editor with the San Francisco Standard. David Goldman, one thing that's going on right now is G7 meeting in Canada. These are the big manufacturing economies, or many of them. What do you think might come out of that, if anything? Are you watching it? Do you expect big news?

Well, going into this, we thought we might get a few more trade deals coming out of it. Now with the conflict in the Middle East, it seems like that has taken over a lot of the discussions in the G7. But they can't afford – these world leaders who are going, they can't afford not to talk about trade and there are a number of bilateral discussions between President Trump and other world leaders where we expect that trade is going to be a topic of conversation.

And the reason is that we're running up against this July 9th deadline where those reciprocal tariffs go back into effect.

Now, the administration has said that it's possible that there are some more delays that could happen from trading partners that just haven't been able to get a deal done but they're really working hard to get a deal done with the United States. For others though, they've said that we're just going to tell you what the new tariff is and we're going to put it in place and that could even come the next couple of weeks.

Now, it's been the next couple of weeks for about a month for the Trump administration. So we'll see if that actually plays out. But, yeah, these these world leaders certainly want to get a hold of the United States, you know, Trump and his administration to try to get some of those deals done sooner rather than later. Yeah. Yeah.

Back on the local side here, John writes in to say, I live in Kensington, and before Trump, I saw giant car carriers two or three times a week docking at Richmond Inner Harbor Terminal. Now car carriers appear maybe once a month. Think of the ship pilots, the stevedores, railroad carriers.

rail yard workers out of work. The Port of Richmond lost docking fees. Kevin, I know you've also been tracking this at the Port of Oakland. Yeah, we saw container volume at the Port of Oakland drop quite significantly from March to April. And it's since sort of

stabilized a bit, but we're seeing year-over-year drops on a month-to-month basis. If you look at actually the first quarter, though, we're actually seeing container volume increase. And this is a little bit of what we were talking about before when we saw a lot of companies essentially doing hoarding, drawing product

earlier to avoid the tariffs and really stockpiling a lot of the things that they may need later in the year. And this is sort of happening at a smaller scale, too. I've talked to a few merchants in Chinatown where you open up the closets in the back and just product is overfilling and literally almost falling on top of you. And what they're saying is, oh, we actually would like more if we actually had a little bit more storage space. And this is the way that they are trying to

Prepare for the eventuality that maybe these higher prices and higher tariff regimes are going to be made permanent.

What is the expected blowback re-tariffs on goods from California? I hear from many folks that business has already weighed down. Input costs for things like bottles and barrels are skyrocketing. Could this be a death spiral for our state's export-dependent agricultural sector? Kevin?

Yeah. If you look at what goes into making, let's say, a bottle of wine in Napa or Sonoma, you're talking about glass that comes from China. You're talking about barrels that often come from Europe or old growth forests. And in France, you're talking about

the foil that I forget the exact name for the tin on the top, which actually also comes from Europe, the cork, which comes from Portugal or Spain. And a lot of this global supply chain goes into what actually makes the cost of, of,

a bottle of wine outside of the grapes themselves. And we're seeing a lot of local wine producers, which are under pressure for a lot of different reasons. This is another, in the words of one of our callers, another nail in the coffin that they're really experiencing.

as they figure out whether to eat these costs and try to or try to pass them along to folks who are now a little bit more cost conscious when they're trying to export or sell to some of the local restaurants or businesses that they sell to. Well, and David, to the second part of that question, too, right? I mean, there's also this sense that maybe the U.S. as a trade partner is going to have our exports to other countries.

countries hurt? Or is that one of those things that would be included in a hypothetical trade deals under the Trump administration? Right. We've seen some retaliatory tariffs already from Canada and we've heard them from the EU, certainly from China. And so, you know, there are two fronts now that some U.S. businesses are fighting. They're fighting the tariffs from the Trump administration and they're fighting retaliatory tariffs from

from foreign trading partners. And so it's in everyone's interest to get these trade deals done because in theory, it could open up U.S. exports to some markets that they weren't open to before. That's the idea. That's the goal, I think, that the Trump administration has set out is can we make trade more fair than it was before we started doing these tariffs?

Sid, one of the things I'm curious about here is how much these businesses can reshape their supply chains and their networks of suppliers. I mean, this is something that you all have a view into. Do you see a ton of change in the types of suppliers that businesses are working with in order to ameliorate the effects of the tariffs?

Yeah, I think change is hard and change takes time. But on the topic of the California-based wine producers, the challenge with exporting their product is something that

you know, is quite well understood. And I think we should all be cognizant of, but if you think about the flip side of that, if you, if you think about the number of bars and restaurants and grocery retailers that are trying to stock wine on their shelves, um,

the Italian wines that they are attempting to import have seen cost increases go through the roof. So many of these local bars, restaurants and grocery retailers are now wondering if they can procure more red wine or white wine from domestic California based wineries in order to protect themselves against price volatility. So there is like a domestic consumption opportunity that local wine producers also experience. But, you

You know, if you're a boutique restaurant somewhere that specializes in serving Spanish wine, it's very difficult for you to go overnight from a trade partner network of foreign partners to now needing to discover local or domestic wine producers that you need to move your procurement's bandwidth.

And that's the question that we see a lot of local businesses asking is how quickly can I dynamically adapt? How much adaptation is the right level?

Maybe you go from sourcing 70% foreign sourced wine to maybe only 30% foreign sourced wine in the interests of shifting your procurement strategy to be primarily domestic because then you don't really have to hedge. But then what does that mean in terms of prices that you extend your products to end customers at? Does that take a hit on the brand or the perception that your customers have when they come in to dine with you? These are all important questions to consider.

And the other challenge that we see, and one of the reasons why Nuvo exists as a business, is a lot of these trade activities between businesses still rely on direct relationships, pen, paper, phone calls, handshakes. So,

Again, to go overnight from I need to find myself new California-based wineries to replace my Spanish wine exporters, that's a very jarring and a very anxiety-provoking set of decisions that the average operator needs to undertake. We're seeing it happen through necessity. Can it be easier? Can it be faster? Can it be more driven by technology? I think those tailwinds will help.

make the adaptation hurt less. But the businesses that are adapting the fastest are able to succeed in this tariff regime and the ones that are kind of bunkering down and letting, you know,

run its course, they're starting to feel that pain because they're not able to be competitive at a business fundamentals level in comparison to the ones that are being more dynamic. So in summary, I think the headline here is

It's hard to just let time run its course, especially for small businesses that are cash flow constrained. And it's better for as many businesses as possible to explore a diversification strategy of all of their vendor partners so that they can more easily shift their procurement spend based on how these trade deals shake out with international trade partners. Yeah.

a couple of uh related comments coming in from listeners steve on the discord writes we should also recognize that quote tariff is just a tax on american businesses it's just targeted at businesses doing business with one country or another but it's simply blind to the issue of whether these products are even available via domestic manufacturing another listener on blue sky writes in the past 20 years we've become totally dependent on china for products needed in our daily lives and david goldman

I wanted to return kind of where we started the show, which is around this idea that these tariffs could revitalize American manufacturing. This is certainly why some labor leaders over time have wanted to have tariffs, a kind of tariff argument from the left. Do we see the full set of policies in place that would be necessary to actually bring manufacturing back in some places with these tariffs? No. So Sid raised such a good point.

It is very, very difficult if you're a business to make a decision about putting a factory in the United States to go make widgets.

overnight, right? And so Ford CEO said exactly this just a few weeks ago, and it was so telling, right? Where he said, yeah, you can put a 25% tariff on Ford cars, but to make a Ford car in the United States exclusively, if we built a factory there in Indiana tomorrow, right?

Right. You can't just throw a switch and turn that on. There are a number of factors. It's really, really hard to make a car and you have to have all the different parts come in from lots of different places. And so it could take three years to get that done. And so there are some suggestions that the tariffs are having an effect.

General Motors just made a $4 billion investment in U.S. manufacturing. Apple has made a $500 billion investment in U.S. manufacturing. There are other – the Trump administration loves to talk about all of the different companies that are saying that we are going to invest in the United States. Some of it was preannounced before these tariffs and they're using it to say –

The tariffs helped us with that. Thank you, Mr. President. Some of them are new. But regardless, between now and the next three to four years of the Trump administration, we're not necessarily going to see a manufacturing explosion. How do we know that? Well, there are about 500,000 U.S. manufacturing jobs that are open today. That's according to the Bureau of Labor Statistics that puts this out every single month.

And they have a job openings report. And there are companies that are clamoring for U.S. workers to come and work in their factories, and they can't get them. That's because U.S.-based employees don't necessarily want those jobs. They're dangerous. They're low-paid. And

And they're not, you know, in this environment where we have 4.2 percent unemployment, they're not highly sought after. It is going to take a very, very long time to do the kind of stuff that Trump wants to do. Rick in Fremont on this point. Welcome, Rick.

I thought that to reestablish manufacturing in the U.S., it would need a modestly compensated workforce. But in the U.S., real estate is an investment vehicle now. So where will the modestly compensated workforce live?

Yeah. I mean, Rick, it's, you know, to your, to David's exact point, right? I mean, these are, this is not a mid-century General Motors job where you, you know, buy a house in the suburbs of Detroit on one of these salaries, right, David? I mean, this seems to be one of the key complexities here.

That's exactly right. And so typically the kind of people who are attracted to this job are new immigrants who are looking to take on, you know, potentially a more dangerous, a lower cost job. Well, then that adds to the question. Well, first of all, are we bringing in new immigrants into this country? A lot of companies are saying not enough, right? They need a bigger immigrant labor force to help

to do the work that they want to do. And the Trump administration policies are certainly restrictive on immigration right now. And then this is such a key point is where do they live, right? We can't, we are in such a housing affordability crisis right now. We just are not making enough homes

To satisfy the growing population in the United States. And that's why rent is so high and that's why it costs so much to buy a house in this country. And so where you live is a big, big question. Yeah.

Two really interesting perspectives. Mick writes in to say,

The suppliers quote indicated a quote tariff. I am considering a massive rescoping of the project to manage this cost. More likely I'll just abandon the project until this tariff nonsense is over. Meanwhile, John writes, I am a construction manager for a nationwide commercial contractor. The tariff issue has been front and center on many of our projects over the past six months. One thing I have found is that it's incredibly Byzantine to try to decipher what the actual tariffs are on specific items.

Any advice from your panel on the best way to determine actual tariffs that are in place? Sid, maybe we'll start with you and then go to you, Kevin. Yeah, I mean, there are sort of government registries and a swath of other resources that have accurately posted to the day tariff percentages. So being able to access that information, you kind of have to swim through a little bit of complexity, but the information is publicly posted.

But I think there's an interesting point around the level of transparency that we all feel like we have around how cost overruns and the cost of tariffs are impacting everybody.

I think one of the reasons for this, I don't necessarily want to jump the gun and say that the suppliers of the world are all kind of price gouging us to oblivion because there are oftentimes very, very competitive industries where suppliers exist. If you're selling commodities, whether it's like lumber or steel or glass or

These tend to be competitive categories where margins are fairly slim. So if you had a swath of 10 suppliers trying to price gouge, you'd have another 100 that would use that as an opportunity to have a more cost competitive offering that you could instead go and purchase from there.

I think the hidden complexity here is that we live in extremely globally interconnected supply chains where the precursors to making that glass can originate in one country. And then those precursors end up in like a glass production facility in a different country. And then you have an import export trader that

gets it into the hands of a distribution facility that might be in yet a different country. And then finally, you might have a general contractor in the US that's purchasing from that glass distributor. So the interconnectivity of our supply chains means that

Any physical good has likely hopped around at least five to ten different businesses, maybe two to five countries before they make it into our hands. And it's hard to say exactly where those kind of tariff cost introductions have been placed. What a great point, Sid. And I'm really glad you made it so that people can kind of visualize in their heads the shape of these trade trends.

networks and these global supply chains. You know, we've been talking about the Trump administration's current tariff deals, what they could mean for jobs, prices, horses, apparently, construction projects. We've been joined by Sid Miladi, who is CEO and founder of Nuvo. Thanks so much for joining us. Thanks for having me. We've been joined by David Goldman, executive editor with CNN Business. Thank you, David. Thank you. And we've been joined by Kevin Tronk, business editor with the San Francisco Standard. Thank you so much, Kevin. Thank you.

I'm Alexis Madrigal. Stay tuned for another hour of Forum Ahead with guest host Leslie McClurg. Funds for the production of Forum are provided by the John S. and James L. Knight Foundation, the Generosity Foundation, and the Corporation for Public Broadcasting.

Support for Forum comes from the University of San Francisco School of Management. Celebrating 100 years of partnership with the Bay Area business community, the USF School of Management connects students to the city's vibrant culture, hands-on internships, and a wealth of career opportunities. Where AI and sustainability are integrated into every facet of business education.

and where students bring innovation, ethics, and entrepreneurial leadership to a planet in need.

The University of San Francisco School of Management. Change the world from here. Support for KQED podcasts comes from Earthjustice. As a national legal nonprofit, Earthjustice has more than 200 full-time lawyers who fight for a healthy environment. They wield the power of the law to protect people's health, preserve magnificent places and wildlife, and advance clean energy to combat climate change. Earthjustice fights in court because the Earth needs a good lawyer.

Learn more about how you can get involved and become a supporter at earthjustice.org. Hey, it's Glenn Washington, the host of the Snap Judgment podcast. At Snap, we tell cinematic stories that let you feel what it's like inside someone else's skin. Stories that let you walk in someone else's footsteps. Storytelling like you've never heard before.

The highs, the lows, the joys, the pain, the twists, the turns, the laughs, the life. Snap Judgment drops each and every week. Listen wherever you get your podcasts.