Trump tariffs: A recap & Its effects in Santa Monica

‍ ‍ Daniel Torok//White House

President Donald Trump announcing his ‘Liberation Day’ Tariffs on April 2 at the White House Rose Garden.

Following his return to office, President Donald Trump imposed sweeping tariffs on imports to the United States, a key promise made throughout his presidential campaign. In a speech given at the White House Rose Garden, Trump declared April 2 as “Liberation Day,” announcing his intent to take “back our economic sovereignty” and initiate “America First trade.”

"Jobs and factories will come roaring back into our country, and you see it happening already. We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers, and ultimately, more production at home will mean stronger competition and lower prices for consumers," Trump said. 

Trump imposed a 10 percent baseline tariff on all imports to the U.S., and imposed additional tariffs that varied based on each country and product.

Trump’s primary motive in adding these tariffs was to stimulate production in the United States and decrease reliance on foreign products. By aiming to boost manufacturing within the United States, the Trump Administration hopes to create jobs and encourage customers to revert to buying American-made goods. 

By applying economic pressure to foreign countries through increasing tariffs and minimizing the exports of U.S. trading partners, the Administration believes that re-negotiations can be made that produce “favorable” trade terms for the United States.

Countries such as the United Kingdom have struck deals with the United States for lower tariff rates. On June 16, an agreement was signed by Trump that gave the United Kingdom a lower tariff rate for its exports. This agreement also reduced the tariff on ethanol from the United States to Britain from 19 to zero percent in return. Trade deals have also been struck with the European Union and various Asian countries following heavy negotiations.

Foreign countries responded almost immediately by implementing retaliatory tariffs in a proportionate manner. An example is the trade war between China and the United States, where both countries continued to increase the cost of the tariff. 

On April 2, China instated an additional 34 percent tariff onto U.S. goods. On April 9. Trump increased the tariffs from 34 to 84 percent in response to China’s 34 percent tariff. China met this tariff increase, and also responded when Trump increased the tariff from 84 percent to 125 percent, which became effective on April 12. This conflict was brought to a truce between both countries on Oct. 30, when Trump met with Chinese President Xi Jinping in Busan, South Korea. 

The Trump Administration has justified this action under the International Emergency Economic Powers Act (IEEPA), which allows the president to regulate economic transactions, including freezing assets and imposing trade restrictions in the event of a national emergency. The White House cited “the national emergency posed by the large and persistent trade deficit,” and the flow of illegal immigration and drugs from neighbouring countries and China to legitimize the imposition of tariffs. 

These tariffs were met with mixed reactions by local business owners within Santa Monica and throughout the nation. 

Roberta Bortolotti, manager at Guidi Marcello Co. Ltd., explains how the tariff on imported goods led to increased store prices. Guidi Marcello is an Italian store located in Santa Monica that sells strictly imported food products from Italy.

“Our customers are getting used to it, because it's not only us but other stores that import. We were really worried about it, and we had lower sales, especially in August and September,” Bortolotti said. 

Jared Freedman, partner at Citizens of Humanity, a Los Angeles-based denim label, explains the effect of the tariffs on their brand.

“The tariffs have doubled, but we feel like we didn’t want that to affect our prices, so we’ve subsidized the extra costs so the customers don’t feel a difference,” Freedman said.

Naiceli Noronha, an employee at Supermercado Brazil, a Brazilian general goods store in Culver City, explains how the tariffs have increased the prices of the products they buy from their suppliers. 

“[Customers] complain, saying that the prices have increased lately, but we can’t do anything. We have to increase it too,” Noronha said. 

The tariffs and their economic efficacy have been a particularly divisive topic for organizations with a focus on trade and manufacturing. 

Alliance for American Manufacturing President Scott Paul responded positively to the Liberation Day tariffs on April 2, emphasizing how this action shows progress for bringing manufacturing back to the United States. 

“Today’s trade action prioritizes domestic manufacturers and America’s workers. These hardworking men and women have seen unfair trade cut the ground from beneath their feet for decades,” Paul said in a press release titled ‘White House Pushes Back Against Decades-Long Trade Imbalances’. 

On April 3, the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, expressed her view of the tariff’s risk in curtailing global growth and leading to inflation. 

“We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth,” Georgieva said.  

The legal justification behind the tariffs has been questioned by several parties, including business owners, federal governments, and members of the Supreme Court and Congress. On Nov. 5, a case regarding the legality of the tariffs was brought to the Supreme Court, with a ruling expected in the coming months. 

On Nov. 28, Costco Wholesale Corporation filed a lawsuit against the Trump administration, asking the U.S. Court of International Trade to deem the tariffs illegal. The company is seeking a full refund on all of the money it has paid under the increased tax rate. In the lawsuit, a lawyer wrote that “because IEEPA does not clearly authorize the president to set tariffs ... the Challenged Tariff Orders cannot stand and the defendants are not authorized to implement and collect them.” 

Because of the increase in price to import from foreign countries as a result of the tariffs, businesses within the U.S. are expected to buy less or stop buying altogether from the foreign countries. Nationwide, many businesses that import their products have had to increase their prices to compensate for the tariffs. In some cases, this has worked, but small businesses in particular have seen profit margins condense and declines in sales.

As the tariffs remain in effect, their impact in the following months is uncertain as trade policies are subject to change as a result of their legal basis.