2 weeks Ago
PHOENIX — After the Trump administration announced Monday an agreement to pause potential tariffs against Canadian imports, one supply chain expert told 12News the whiplash of tariff news coming out of Washington D.C. is not helpful to U.
S. businesses. “This sort of a back and forth, creating uncertainty amongst workers, amongst consumers, amongst businesses, and amongst countries is not something that businesses like,” said Regents Professor Sunderesh Heragu at Oklahoma State University.
Over the weekend President Trump also announced a one-month tariff delay with Mexico after that country agreed to add security at the border and the U.S. agreed to take additional steps to stop the flow of guns into Mexico.
The Greater Phoenix Chamber of Commerce said over the weekend Arizona’s agriculture and manufacturing sectors would bear the brunt of tariffs, saying, “We strongly urge the Administration to engage in cooperative dialogue with other nations to prevent supply chain disruption.” Chandler pet store relies on Canadian dog food “I can't control the distribution. I can't control the tariffs that our government may put on,” said Megan Ames, owner of Bark and Luv luxury pet store https://barkandluv.
com/ in Chandler. Three of her biggest dog food brands are from Canada. “I hope we can keep our prices the same and not have to, not have to have too much of an impact,” Ames said.
Another Valley company, Taco Chelo in downtown Phoenix, relies on tequila imports from Mexico. The restaurant sells about 200 margaritas per day. The agave-based liquor is a small example of imports from Mexico that Arizona businesses rely on.
Creating 'unnecessary drama' Heragu said larger industries, such as housing, could be impacted by a tariff because Canada is a major exporter of lumber to Arizona. “In a state where housing is, you know, still unaffordable for so many, when you add these dimensions to it, it's just going to make it all the more difficult for people to move,” Heragu said. Mexico and Canada also manufacture components for the auto industry and big tech.
One problem is the Trump administration is sending mixed messages, Heragu said. A deal approved by then-President Trump in 2019 opened trade relations between Mexico and Canada, a deal Trump wants to change. “The three countries entered into an agreement,” Heragu said.
“And now, if you are rethinking that, you know, six years later, what does the world think of the US as a trading partner? Are you reliable? Are you not? Why are you creating this uncertainty?” Heragu calls the current back-and-forth “unnecessary drama.” Harley Davidson was a tariff success story Economists measure the effects of tariffs in the short, medium, and long term. Potential short-term effects include increased grocery prices and slight inflation, Heragu said.
Medium to long-term effects include reduced supply, higher prices, and potential shifts in trade relationships. However, beneficial effects include companies diversifying their supply chains and bringing production onshore. A tariff on Japanese imports promoted by Harley Davidson and signed off by President Ronald Reagan in the 1980s led to increased efficiency and competitiveness for the motorcycle company.
The tariff was then lifted. “Sometimes maybe it's for the better,” Heragu said. “Maybe there's more domestic production.
But I still think, even if that happens, that's going to require a realignment of supply chains and production plants and all that. But that's going to come at a cost, right?”.
