President Donald Trump鈥檚 on-again, off-again tariffs are putting many California businesses, jobs and the at risk. They鈥檙e affecting not only long-term relationships with trading partners, but an intricate web of ecosystems and supply chains.
The California business owners and groups grappling with the tariffs 鈥� wine shop owners, winery founders, farmers 鈥� say the precise effects on their industries are unclear so far. They hope there will be an upside.
But for those who have a broad view of trade, things look grim.
The Port of Los Angeles and the Port of Long Beach, the busiest ports in North America, both saw first-quarter increases in imports, but declines in exports, year over year.
Gene Seroka, executive director for the Port of Los Angeles, attributed the higher volume of cargo being moved to 鈥渇ront-loading as a hedge against tariffs鈥� during a recent media briefing. But he said his port saw year-over-year declines in exports for the fourth month in a row, 鈥渞aising concerns for our (agriculture) and manufacturing partners as counter-tariffs on exports begin to take effect.鈥�
Seroka 鈥� who said companies have been telling him they are holding back on hiring and capital investments 鈥� predicted a slowdown in cargo movement beginning in May, and expects a 10% drop in volume from July until next year. His predictions are already beginning to show up in the port鈥檚 import volume.
Some of that may be due to a decline in Chinese imports. On April 9, Trump raised his tariff on China to 145%, although he later exempted certain electronics, such as laptops and smartphones. China responded on April 12 with 125% tariffs on U.S. products. Chinese goods represent 40% of the imports that pass through the Port of Los Angeles, Seroka said.
A decline in volume will affect port jobs, though he doesn鈥檛 anticipate mass layoffs, he said. More than 1.5 million jobs are tied to the two Southern California ports.
The effects of decreased trade will vary for different businesses in the state 鈥� even within the same industries.
The California wine industry
A wine merchant in Walnut Creek who sells mostly European wines 鈥� on which the president 鈥� said he鈥檚 going to have to make adjustments, like carrying more California wines, or consider closing up shop.
鈥淚鈥檇 have to think about whether it鈥檚 worthwhile staying in business,鈥� said Igor Ivanov, owner of wine shop Vinous Reverie. He added that the tariff issues are just the latest of the wine industry鈥檚 woes, which include the fact that people just as they used to.
On the other hand, increased tariffs on European wine could help boost California wine.
Natalie Collins, president of the California Association of Winegrape Growers, said tariffs on competing wines could help local wine growers.
Bruce Lundquist, co-founder of Rack & Riddle, which he said is the largest custom producer of sparkling wine in the nation, agreed with Collins: 鈥淚 wish Americans would look at wines grown in their backyard.鈥�
Lundquist said so far Healdsburg-based Rack & Riddle is OK 鈥� the company is stocked up on supplies that he orders from different places, both in and out of the country. But he can鈥檛 say what his winery and retail clients might be going through. Lundquist worries about tariff uncertainty dragging on, say through next year. 鈥淭here would have to be a reckoning if this thing were to go on,鈥� he said. 鈥淚t鈥檚 already hard enough to run a winery.鈥�
What鈥檚 at stake as the U.S. wine industry grapples with tariffs: $86 billion in annual sales, U.S. Census Bureau data said. California exported $1.3 billion worth of wine in 2022, per the California Department of Food and Agriculture.
Even if the wine produced in this country stays here, tariffs mean winemakers face higher costs on everything from bottles 鈥� glass mostly imported from China 鈥� to labels and corks, to metal posts and wooden stakes for the vines. As for U.S. wine exports, 95% of those come from California, says Gino DiCaro, spokesperson for the Wine Institute.
And 35% of exports go to Canada, which now has a serious don鈥檛-buy-American, in effect because of the president鈥檚 threats about tariffs and annexing Canada.
鈥�(Canadians) are voting with their feet, and there鈥檚 a real sense of betrayal and a sense of shock,鈥� said Rana Sarkar, consul general of Canada in San Francisco. 鈥淓conomic crisis within Canada will no doubt ensue from this, but it will also be deeply painful in the United States.鈥�
California recently became the first state to . Gov. Gavin Newsom said the tariffs鈥� trade and geopolitical effects are 鈥渙utsized,鈥� while Attorney General Rob Bonta said the president bypassed the power of Congress to tax and regulate commerce by declaring a national emergency. California鈥檚 lawsuit seeks to pause the tariffs immediately.
But in some cases, the damage is already done. The office of U.S. Rep. Mike Thompson, a Democrat whose district includes Napa鈥檚 Wine Country, shared anonymized anecdotes from winery owners and managers, who the congressman鈥檚 staff said are afraid to go on the record. Thompson鈥檚 constituents say their Canadian business partners have canceled hundreds of thousands of dollars worth of orders, and that potential sales to Mexico or the European Union are on hold. One medium-size winery in St. Helena told Thompson鈥檚 staff that since the tariffs Trump imposed during his first term, it has lost 90% of its business with China and is no longer seeking to sell there: 鈥淐hina has turned to other wine regions across the globe and we believe rebuilding this market will take over 20 years.鈥�
In addition, 鈥渢he uncertainty itself has had damage, even though we (may not) get the tariffs,鈥� said Daniel Sumner, economics professor and director of the University of California Agricultural Issues Center at UC Davis.
California and other producers of agricultural products want to be able to tell customers they鈥檙e reliable suppliers, Sumner said. 鈥淏ut you can鈥檛 do that if prices can go up. That鈥檚 a real problem,鈥� he said.
Sumner added: 鈥淎 major concern for any industry is the increased likelihood of a global recession and slower growth in general.鈥� Investment banks and economists . Citing Trump鈥檚 tariffs, the International Monetary Fund has for U.S. and global economic growth this year.
Farming: Almonds, dairy and other crops
Ryan Talley is vice president of Talley Farms in Arroyo Grande, in San Luis Obispo County, which was started in the 1940s by his grandfather. Now his children are the fourth generation of his family to work for the farm, which grows a few dozen crops.
Talley said his medium-size farm is still able to sell spinach to Canada, but he鈥檚 concerned about being able to sell bell peppers to the country, because harvest season for those won鈥檛 come until August through November. He hopes the United States-Mexico-Canada Agreement will protect those sales 鈥� but Trump has threatened tariffs on Canada and Mexico a few times.
Talley Farms鈥� other crops 鈥� including cabbage, kale, lettuce and corn 鈥� are distributed domestically but are highly perishable. Talley said that means it鈥檚 tough to adjust operations to any tariffs because of changes to fuel, fertilizing or other supply costs.
鈥淲e don鈥檛 have months to wait something out,鈥� he said. 鈥淲e have to continue our operations at the intensity that we currently farm.鈥� He added that 鈥渨e鈥檙e going to have to take those rising prices and deal with it the best we can.鈥�
In addition, Talley worries that one possible effect of tariffs is a glut of domestically grown crops. 鈥淚f the majority of U.S. farms weren鈥檛 able to export their product, everything would stay here, which would completely flood the market and send prices down,鈥� he said. 鈥淚t would be great for consumers (in terms of prices) but in the end it would hurt the American farmer.鈥�
But Talley鈥檚 biggest concern is his farm鈥檚 workers, who could be affected by Trump鈥檚 stated intent of mass deportations: 鈥淚 can withstand an increase in fuel prices and fertilizer prices and regulatory burden to an extent. But if you take away my labor overnight, it would be hard for us.鈥�
It鈥檚 almost impossible to find a part of California agriculture unaffected by Trump鈥檚 tariffs.
Shawna Morris, executive vice president of trade policy at the National Milk Producers Federation, said she is concerned about California鈥檚 dairy exports to Mexico, including cheese. The other really big market for California dairy products is China, which has already 鈥減ulled the trigger鈥� on retaliatory tariffs, Morris said. California鈥檚 dairy exports totaled $3.2 billion in 2022.
California鈥檚 biggest export, almonds, had $4.7 billion in foreign sales in 2022. Their longer shelf life is a plus, said almond farmer Jenny Holtermann, in Kern County. 鈥淲e harvest once a year, then (our processor partners) sell throughout the year,鈥� she said. 鈥淭he tariffs won鈥檛 affect us instantly.鈥�
Holtermann has experience from the tariffs the president imposed during his first term. She would not share specific numbers for her own farm 鈥� which has also been in her family for four generations 鈥� but acknowledged those tariffs hurt the almond industry, which is 鈥渏ust now starting to rebound.鈥�
Almond growers saw their prices drop from $2.50 a pound to $1.40 a pound after Trump鈥檚 tariffs in 2018, according to from the University of California Giannini Foundation of Agricultural Economics.
Holtermann said farmers鈥� costs have only gone up, so her farm has adjusted by using less fertilizer, buying fewer tractors or letting trucks run a little longer before replacing them.
But she said she thinks the president鈥檚 tariffs are part of 鈥渁 long-game approach鈥� to get our country back to the economic powerhouse we鈥檙e supposed to be.鈥�
Besides, Holtermann is counting on a couple of things. One is California almonds鈥� dominance: The state produces 80% of the world鈥檚 almonds, says the Almond Alliance.
The other thing she鈥檚 hoping for is another possible federal bailout, which has been discussed by the Trump administration. During the Trump 1.0 trade war, the federal government provided farmers with 鈥渕arket facilitation funds鈥� of $23 billion to try to offset the business they lost as a result of China鈥檚 retaliatory tariffs on the United States, the Government Accountability Office said in a 2021 report.
The U.S. Department of Agriculture has not responded to CalMatters鈥� questions.
Those funds helped her farm last time, Holtermann said, so she鈥檚 hoping for more of the same. 鈥淚 do know he supports agriculture,鈥� she said of the president. 鈥淗e鈥檚 had a lot of meetings with agriculture organizations.鈥�
Still, she expects to take a short-term hit from tariffs this time around, including losing business from certain countries. 鈥淚鈥檓 not naive,鈥� Holtermann said. 鈥淚鈥檓 sure we will miss a portion of that market share.鈥�
But Shannon Douglass, president of the California Farm Bureau, is concerned about getting global buyers to return once they switch to other sources. 鈥淲e know the last round, almonds and pistachios saw a 20% drop in exports,鈥� she said. 鈥淥nce they have moved it can take a long time to get those markets back.鈥�