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California businesses are reeling from Trump's on-again, off-again tariffs

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California businesses are reeling from Trump's on-again, off-again tariffs

Tariffs haven’t yet hit the supply chain at Anawalt in Malibu, but the hardware store and lumber seller is bracing for steep price hikes in the coming weeks.

The majority of the lumber that the store sells comes from Canada and nearly all of its steel products are made in China, general manager Rieff Anawalt said. Those countries, along with Mexico, have been targeted in sweeping tariffs imposed by President Trump during his second term, sparking a global trade war that intensified this week.

“These tariffs are 100% going to impact us,” Anawalt said. Wholesale reps for the family-run hardware company, which has five locations around Los Angeles County, have warned him to expect prices to go up by April 1 — costs that he said he’ll have to pass on to customers.

“We’re going to see major increases: 15% to 25% across the board in this industry,” he said. “It’ll make COVID prices seem cheap.”

Across California, businesses of all kinds — farmers, automakers, home builders, tech companies and apparel retailers — are reeling from weeks of on-again, off-again tariff chaos as Trump has announced a slew of levies against the country’s top three trading partners, implementing some while modifying, delaying or reversing others.

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“It’s a day-by-day soap opera, and just like a soap opera, you get relief, then it heats up again,” said Jonathan D. Aronson, a professor of international communication and international relations at USC.

As a result, business owners “don’t know what’s going to happen,” he said. “They can’t plan. They don’t know how much to produce. They don’t know who their business partners are going to be.”

This month has been particularly tumultuous. On March 4, Trump’s 25% tariffs on imports from Canada and Mexico kicked in, with a limit of 10% on Canadian energy; he also doubled the tariff on all Chinese imports to 20%. All three countries vowed to strike back with their own measures.

A lumber yard in British Columbia, Canada, last month. Canada is the largest foreign supplier of lumber to the U.S.

(Bloomberg via Getty Images)

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The next day, Trump granted a one-month exemption for U.S. automakers on his new tariffs on imports from Canada and Mexico. The day after that, he said he was postponing many of the tariffs on Canadian and Mexican imports for a month.

On Monday, in a blow to farmers in California and across the U.S., China imposed retaliatory duties of up to 15% on American agricultural products including chicken, corn, beef, pork, wheat and soybeans. Then on Wednesday, Trump’s 25% tariffs on all steel and aluminum imports went into effect.

To counterbalance the effects of the tariffs on their bottom lines, businesses may have to overhaul their operations, said Jerry Nickelsburg, faculty director of the UCLA Anderson Forecast.

“The way in which firms react to that uncertainty is to not put all their eggs in one basket,” he said. “So they cut back on how much they would order, which means they’re going to produce less and they need fewer people — or if not fewer people, fewer hours for the people they have.”

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The latest volley came Thursday morning, when Trump threatened to place a 200% tariff on wine and liquor from the European Union in response to the EU proposing a 50% tariff on American whiskey. About an hour later, he wrote in a follow-up post on Truth Social that the U.S. “doesn’t have Free Trade. We have ‘Stupid Trade.’”

“The Entire World is RIPPING US OFF!!!” he said.

Bolstering the economy was one of Trump’s core promises during the election, and tariffs are key to his strategy. He threatened to slap tariffs on Mexico, Canada and China on his first day back in office, explaining the decision as a way to crack down on illegal immigration and drugs.

But the escalating trade tensions have pummeled Wall Street for three weeks. On Thursday, the S&P 500 closed in correction territory, ending the day down 1.39%; the index is now 10.1% below its record close Feb. 19. The Dow Jones Industrial Average fell 537.36 points, or 1.3%, closing at 40,813.57.

The fallout for farmers

The prolonged back-and-forth has also unsettled companies, both those that import goods from abroad and those that sell their products to foreign clients. California’s economy could be especially hard hit because of its heavy reliance on trade with China and Mexico, and because of its position as a global agricultural powerhouse.

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Farmer Joe Del Bosque holds a raw almond.

Farmer Joe Del Bosque holds a raw almond in Firebaugh, Calif.

(Robert Gauthier / Los Angeles Times)

California farmers grow the largest share of the nation’s food — more than a third of the country’s vegetables and more than three-quarters of its fruits and nuts are grown here — and the state’s fertile ground is a major supplier of produce to countries around the world. Farmers also rely heavily on fertilizer from Canada, which could cost more as the tariffs take hold.

“Farmers in California are going to be hurt particularly badly because almonds, soybeans and things like that are huge exports of the United States,” Aronson said.

The state also accounts for about 85% of wines produced in the United States and is home to thousands of grape growers and wineries, many of them small and generations-old. The Wine Institute says the industry supports employment for more than 420,000 Californians and generates $73 billion in economic activity in the state. Canada is the largest market for California wine.

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A flurry of activity at the ports

Some L.A.-area companies have been stockpiling inventory to get ahead of expected price hikes tied to the tariffs, said Stephen Cheung, chief executive of the Los Angeles County Economic Development Corp.

“A lot of them were hit pretty hard during the last trade war with China,” he said, “so they knew better than to wait and hope for the best.”

That has been reflected in shipping data from the ports in Long Beach and Los Angeles, which continue to record huge numbers thanks to several months of front-loading cargo ahead of Trump’s inauguration.

The Port of Long Beach moved 765,385 twenty-foot equivalent units, or TEUs, in February, a 13.4% increase from the previous year. January’s year-over-year growth was even larger: 952,733 TEUs — a unit of measurement based on the volume of a standard shipping container — were moved, representing a 41.4% increase.

An aerial view of the Port of Long Beach.

An aerial view of the Port of Long Beach.

(Allen J. Schaben / Los Angeles Times)

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After Trump launched a trade war with China during his first term, the Port of Long Beach lost about 20% of expected Chinese cargo in 2019, Chief Executive Mario Cordero said. That was supplemented by a 10% increase in imports from countries in Southeast Asia including Vietnam, Indonesia and Thailand. He expects the same thing to happen this time around.

In the coming months, Cordero said, the local economy could see supply chain disruptions, similar to what occurred during the pandemic, “if we continue on the path of aggressive and high” tariffs.

The Port of Los Angeles expects a 10% reduction in volume from last year amid Trump’s tariffs against China, Executive Director Gene Seroka said.

It’s a day-by-day soap opera, and just like a soap opera, you get relief, then it heats up again.

— Jonathan D. Aronson, a professor of international communication and international relations at USC

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One of the largest seaports in the country, the L.A. port has seen sharp increases in cargo since last summer as businesses stocked up in anticipation of potential Trump tariffs. Just under 10.3 million TEUs, a near record, passed through the port last year.

Those numbers are likely to trend downward as tariffs take hold and the economy adjusts, Seroka said. “Fewer containers mean fewer jobs.”

L.A. businesses try to adjust

Economists say it’s difficult for companies to quickly change suppliers, and some may be loath to upend their supply chains given the ever-changing nature of Trump’s trade policies.

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Some are trying anyway.

Francesca Grace, an interior designer and home stager in Los Angeles, said tariffs have already affected the availability and price of items including fabrics, wood and other building materials, and smaller decor pieces.

Supply chain delays have extended her project timelines in some cases to three to six weeks from immediate availability, and she’s contending with “at least a 25% rise” in costs for materials from China. As a result, she’s now trying to source all of her products locally, up from 75%.

“While this shift aligns with our values, it will also cause our pricing to increase,” Grace said. “We are doing everything we can to avoid increasing our pricing too much. The last thing we want is for these changes to negatively impact our business or make our designs inaccessible.”

Other businesses say they have little choice when it comes to where they get their merchandise.

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“Lumber prices are what they are. There’s no sourcing it somewhere else, so we’re going to have to deal with it as it comes,” said Anawalt, the general manager at the Malibu hardware store. “It’s so beyond my control, there’s nothing I can do. I was panicked at first, but now I’m just going to wait.”

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DHS responds after reports CISA chief allegedly failed polygraph for classified intel access

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DHS responds after reports CISA chief allegedly failed polygraph for classified intel access

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The Department of Homeland Security (DHS) is disputing reports that acting Cybersecurity and Infrastructure Security Agency (CISA) Director Madhu Gottumukkala failed a polygraph after seeking access to highly sensitive intelligence, as an internal investigation and the suspension of multiple career cybersecurity officials deepen turmoil inside the agency, according to a report.

Politico reported that Gottumukkala pushed for access to a tightly restricted intelligence program that required a counter-intelligence polygraph and that at least six career staffers were later placed on paid administrative leave for allegedly misleading leadership about the requirement, an assertion DHS strongly denies.

The outlet said its reporting was based on interviews with four former and eight current cybersecurity officials, including multiple Trump administration appointees who worked with Gottumukkala or had knowledge of the polygraph examination and the events that followed. All 12 were granted anonymity over concerns about retaliation, according to Politico.

DHS pushed back on the reporting, saying the polygraph at issue was not authorized and that disciplinary action against career staff complied with department policy.

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KRISTI NOEM SAYS BIDEN USED DHS ‘TO INVADE THE COUNTRY WITH TERRORISTS’

DHS disputes reports that acting CISA Director Madhu Gottumukkala failed a polygraph as staff are suspended amid an internal investigation and intel access dispute. (CISA Facebook)

“Acting Director Madhu Gottumukkala did not fail a sanctioned polygraph test. An unsanctioned polygraph test was coordinated by staff, misleading incoming CISA leadership,” DHS Assistant Secretary Tricia McLaughlin said in a statement provided to Fox News Digital. “The employees in question were placed on administrative leave, pending conclusion of an investigation.”

“We expect and require the highest standards of performance from our employees and hold them directly accountable to uphold all policies and procedures,” she continued. “Acting Director Gottumukkala has the complete and full support of the Secretary and is laser focused on returning the agency to its statutory mission.”

Politico also reported that Gottumukkala failed a polygraph during the final week of July, citing five current officials and one former official.

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WHITE HOUSE CALLS REPORT ABOUT TRUMP CONSIDERING FIRING NOEM ‘TOTAL FAKE NEWS’

DHS disputes reports that acting CISA Director Madhu Gottumukkala failed a polygraph as staff are suspended amid an internal investigation and intel access dispute. (CISA Facebook)

The test was administered to determine whether he would be eligible to review one of the most sensitive intelligence programs shared with CISA by another U.S. spy agency, according to the outlet.

That intelligence was part of a controlled access program with strict distribution limits, and the originating agency required any CISA personnel granted need-to-know access to first pass a counter-intelligence polygraph, according to four current officials and one former official cited by Politico.

As a civilian agency, most CISA employees do not require access to such highly classified material or a polygraph to be hired, though polygraphs are commonly used across the Pentagon and U.S. intelligence community to protect the government’s most sensitive information.

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ICE LEADERSHIP SHAKEUP EXPOSES GROWING DHS FRICTION OVER DEPORTATION TACTICS, PRIORITIES

A person administers a polygraph test.  (Getty Images)

Politico reported that senior staff raised questions on at least two occasions about whether Gottumukkala needed access to the intelligence, but said he continued pressing for it even if it meant taking a polygraph, citing four current officials.

The outlet also reported that an initial access request in early June, signed by mid-level CISA staff, was denied by a senior agency official who determined there was no urgent need-to-know and noted that the agency’s previous deputy director had not viewed the program.

That senior official was later placed on administrative leave for unrelated reasons in late June, and a second access request signed by Gottumukkala was approved in early July after the official was no longer in the role, according to current officials cited by Politico.

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KRISTI NOEM FACES FIRST MAJOR HOMELAND SECURITY GRILLING AS LAWMAKERS PRESS HER ON TERROR THREATS

DHS disputes reports that acting CISA Director Madhu Gottumukkala failed a polygraph as staff are suspended amid an internal investigation and intel access dispute. (Celal Gunes/Anadolu Agency via Getty Images)

Despite being advised that access to the most sensitive material was not essential to his job and that lower-classification alternatives were available, Gottumukkala continued to pursue access, officials told the outlet.

Officials interviewed by Politico said they could not definitively explain why Gottumukkala did not pass the July polygraph and cautioned that failures can occur for innocuous reasons such as anxiety or technical errors, noting that polygraph results are generally not admissible in U.S. courts.

On Aug. 1, shortly after the polygraph, at least six career staff involved in scheduling and approving the test were notified in letters from then–acting DHS Chief Security Officer Michael Boyajian that their access to classified national security information was being temporarily suspended for potentially misleading Gottumukkala, according to officials and a letter reviewed by Politico.

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NOEM HITS BACK AT FEMA CRITICS, REVEALS VISION FOR DISASTER RELIEF AGENCY

“This action is being taken due to information received by this office that you may have participated in providing false information to the acting head of the Cybersecurity and Infrastructure Security Agency (CISA) regarding the existence of a requirement for a polygraph examination prior to accessing certain programs,” the letter said. “The above allegation shows deliberate or negligent failure to follow policies that protect government information, which raises concerns regarding an individual’s trustworthiness, judgment, reliability or willingness and ability to safeguard classified information.”

In a separate letter dated Aug. 4, the suspended employees were informed by Acting CISA Chief Human Capital Officer Kevin Diana that they had been placed on paid administrative leave pending an investigation, according to current and former officials and a copy reviewed by Politico.

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Gottumukkala was appointed CISA deputy director in May and previously served as commissioner and chief information officer for South Dakota’s Bureau of Information and Technology, which oversees statewide technology and cybersecurity initiatives.

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CISA said in a May press release that Gottumukkala has more than two decades of experience in information technology and cybersecurity across the public and private sectors.

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News Analysis: Trump’s math problem: Rising prices, falling approval ratings

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News Analysis: Trump’s math problem: Rising prices, falling approval ratings

President Trump made dozens of promises when he campaigned to retake the White House last year, from boosting economic growth to banning transgender athletes from girls’ sports.

But one pledge stood out as the most important in many voters’ eyes: Trump said he would not only bring inflation under control, but push grocery and energy prices back down.

“Starting the day I take the oath of office, I will rapidly drive prices down, and we will make America affordable again,” he said in 2024. “Your prices are going to come tumbling down, your gasoline is going to come tumbling down, and your heating bills and cooling bills are going to be coming down.”

He hasn’t delivered. Gasoline and eggs are cheaper than they were a year ago, but most other prices are still rising, including groceries and electricity. The Labor Department estimated Thursday that inflation is running at 2.7%, only a little better than the 3% Trump inherited from Joe Biden; electricity was up 6.9%.

And that has given the president a major political problem: Many of the voters who backed him last year are losing faith.

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“I voted for Trump in 2024 because he was promising America first … and he was promising a better economy,” Ebyad, a nurse in Texas, said on a Focus Group podcast hosted by Bulwark publisher Sarah Longwell. “It feels like all those promises have been broken.”

Since Inauguration Day, the president’s job approval has declined from 52% to 43% in the polling average calculated by statistician Nate Silver. Approval for Trump’s performance on the economy, once one of his strongest points, has sunk even lower to 39%.

That’s dangerous territory for a president who hopes to help his party keep its narrow majority in elections for the House of Representatives next year.

To Republican pollsters and strategists, the reasons for Trump’s slump are clear: He overpromised last year and he’s under-performing now.

“The most important reasons he won in 2024 were his promises to bring inflation down and juice the economy,” Republican pollster Whit Ayres said. “That’s the reason he won so many voters who traditionally had supported Democrats, including Hispanics. … But he hasn’t been able to deliver. Inflation has moderated, but it hasn’t gone backward.”

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Last week, after deriding complaints about affordability as “a Democrat hoax,” Trump belatedly launched a campaign to convince voters that he’s at work fixing the problem.

But at his first stop, a rally in Pennsylvania, he continued arguing that the economy is already in great shape.

“Our prices are coming down tremendously,” he insisted.

“You’re doing better than you’ve ever done,” he said, implicitly dismissing voters’ concerns.

He urged families to cope with high tariffs by cutting back: “You know, you can give up certain products,” he said. “You don’t need 37 dolls for your daughter. Two or three is nice, but you don’t need 37 dolls.”

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Earlier, in an interview with Politico, Trump was asked what grade he would give the economy. “A-plus-plus-plus-plus-plus,” he said.

On Wednesday, the president took another swing at the issue in a nationally televised speech, but his message was basically the same.

“One year ago, our country was dead. We were absolutely dead,” he said. “Now we’re the hottest country anywhere in the world. … Inflation is stopped, wages are up, prices are down.”

Republican pollster David Winston, who has advised GOP members of Congress, said the president has more work to do to win back voters who supported him in 2024 but are now disenchanted.

“When families are paying the price for hamburger that they used to pay for steak, there’s a problem, and there’s no sugarcoating it,” he said. “The president’s statements that ‘we have no inflation’ and ‘our groceries are down’ have flown in the face of voters’ reality.”

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Another problem for Trump, pollsters said, is that many voters believe his tariffs are pushing prices higher — making the president part of the problem, not part of the solution. A YouGov poll in November found that 77% of voters believe tariffs contribute to inflationary pressures.

Trump’s popularity hasn’t dropped through the floor; he still has the allegiance of his fiercely loyal base. “He is at his lowest point of his second term so far, but he is well within the range of his job approval in the first term,” Ayres noted.

Still, he has lost significant chunks of his support among independent voters, young people and Latinos, three of the “swing voter” groups who put him over the top in 2024.

Inflation isn’t the only issue that has dented his standing.

He promised to lead the economy into “a golden age,” but growth has been uneven. Unemployment rose in November to 4.6%, the highest level in more than four years.

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He promised massive tax cuts for the middle class, but most voters say they don’t believe his tax cut bill brought them any benefit. “It’s hard to convince people that they got a tax break when nobody’s tax rates were actually cut,” Ayres noted.

He kept his promise to launch the largest deportation campaign in U.S. history — but many voters complain that he has broken his promise to focus on violent criminals. In Silver’s average, approval of his immigration policies dropped from 52% in January to 45% now.

A Pew Research Center survey in October found that 53% of adults, including 71% of Latinos, think the administration has ordered too many deportations. However, most voters approve of Trump’s measures on border security.

Republican pollsters and strategists say they believe Trump can reverse his downward momentum before November’s congressional election, but it may not be easy.

“You look at what voters care about most, and you offer policies to address those issues,” GOP strategist Alex Conant suggested. “That starts with prices. So you talk about permitting reform, energy prices, AI [artificial intelligence] … and legislation to address healthcare, housing and tax cuts. You could call it the Affordability Act.”

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“A laser focus on the economy and the cost of living is job one,” GOP pollster Winston said. “His policies on regulation, energy and taxes should have a positive impact, but the White House needs to emphasize them on a more consistent basis.”

“People voted for change in 2024,” he warned. “If they don’t get it — if inflation doesn’t begin to recede — they may vote for change again in 2026.”

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DNI Gabbard warns ‘Islamist ideology’ threatens Western freedom at AmFest

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DNI Gabbard warns ‘Islamist ideology’ threatens Western freedom at AmFest

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Director of National Intelligence Tulsi Gabbard delivered a blunt warning about “Islamist ideology” at a high-profile conservative gathering Saturday, casting the threat as fundamentally incompatible with Western freedom.

“The threats from this Islamist ideology come in many forms,” Gabbard told an audience at Turning Point USA’s (TPUSA) annual AmericaFest conference.

RIFT IN MAGA MOVEMENT ON FULL DISPLAY AT TPUSA’S AMERICAFEST

Director of National Intelligence Tulsi Gabbard oversees the nation’s 18 intelligence agencies. (Ross D. Franklin/AP)

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“As we approach Christmas, right now in Germany they are canceling Christmas markets because of this threat.”

Gabbard, who oversees the nation’s 18 intelligence agencies, said the ideology stands in direct conflict with American liberty.

“When we talk about the threat of Islamism, this political ideology, there is no such thing as individual freedom or liberty,” she said.

Gabbard’s remarks were notable given her role overseeing the nation’s intelligence community, a position that traditionally avoids overt ideological framing in public remarks, particularly at partisan political events.

TPUSA BEGAN AS A SCRAPPY CAMPUS GROUP AND GREW INTO A NATIONAL, MULTIMILLION-DOLLAR POLITICAL FORCE

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AmericaFest 2025, hosted by Turning Point USA, is taking place in Phoenix, Arizona. (Jon Cherry/AP)

Turning Point USA’s AmericaFest has become a marquee gathering for conservative activists, lawmakers and influencers, where national security, immigration and cultural issues are increasingly framed as part of a broader ideological struggle.

The Office of the Director of National Intelligence did not immediately respond to a request for comment clarifying whether Gabbard’s remarks reflected official U.S. intelligence assessments or her personal views.

TPUSA founder Charlie Kirk positioned the organization as a hub for conservative youth activism, frequently hosting high-profile figures who frame political and security debates in ideological terms.

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Charlie Kirk, who founded Turning Point USA, was killed on Sept. 10 while speaking at an event at Utah Valley University. (Joe Raedle/Getty Images)

Kirk carried that influence onto college campuses nationwide, drawing large crowds for live, unscripted debates on religion, Islamism, free speech, immigration and American culture. It was at an event at Utah Valley University where he was fielding open-mic questions from thousands on Sept. 10 where he was shot and killed.

The charged nature of modern political activism has also raised alarms about political violence, with authorities increasingly warning of threats tied to large public gatherings.

European security officials have raised security alerts around holiday events in recent years following a series of Islamist-inspired attacks, including deadly incidents in Germany, France and Belgium, prompting heightened police presence or temporary cancellations at some Christmas markets.

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