In summary
Tariffs, mass immigrant deportations and a drop in tourism all could spell trouble for Inland Empire’s economy.
Lea esta historia en Español
Confusion caused by President Donald Trump’s tariffs is clouding the Inland Empire’s economic forecast, as warehouses and other businesses face a looming trade war.
The Inland Empire Economic Partnership recently released its economic outlook showing consumer pessimism about Trump’s vacillating economic policies. The consumer sentiment index plunged in February.
“Certainly the tariffs can and probably will have a negative effect on the economy of the Inland Empire,” said Paul Granillo, CEO of the Inland Empire Economic Partnership. “Those are prices that are passed onto the consumer and so people buy less … If the tariffs cause a trade war and there’s a dip in exports from China or other places, that will affect the Inland Empire.”
The report offered some good news, though: its authors don’t expect a recession this year.
“There are currently no alarm bells from leading economic indicators,” wrote Manfred Keil, Robert Kleinhenz, and Kenneth P. Miller, researchers with Claremont McKenna College who authored the report.
“We need to say upfront that this year, more so than in most previous years, there is more uncertainty involved in our forecast. This is the result of President Trump announcing certain policies (tariffs on Mexico and Canada, for example), only to postpone them shortly afterwards.”
While tariffs can suppress economic growth, Trump’s on-again, off-again plans to impose them have been particularly confounding to anyone trying to manage inventory or hire workers.
“People don’t like uncertainty and certainly employers don’t like it,” Granillo said.
That instability could ripple through the warehouse and logistics industry, key industries in Riverside and San Bernardino counties. That’s where retail giants Amazon, Wal-Mart and Target disperse imported goods from the Ports of Los Angeles and Long Beach through to the rest of the country.
Did someone forward you this email? Sign up here.
Other Trump policies could also scramble the region’s economic outlook.
Mass immigrant deportations might reduce the construction workforce as Los Angeles tries to rebuild more than 16,000 structures that burned in the Palisades and Eaton Fires in January. And tariffs could constrict construction supplies from Canada, the report warned.
“Canadian lumber is a big part of the homebuilding industry; with tariffs and the current state of relations between the Trump administration and Canada, that’s problematic,” Granillo said. “And a lot of industries — healthcare, hospitality, construction — rely on immigrant labor. That’s going to be a cause of delays and rising costs of building.”
There’s another pernicious effect of tariffs on the Coachella Valley tourism sector, the report warned. The loss of goodwill is prompting some Canadian visitors to cancel U.S. travel.
“The Coachella Valley is the winter home of thousands of Canadians,” Granillo said. “And many of them are choosing not to come to the United States because of the tensions between the Trump administration and Canada.”
Granillo said he’s trying to get numbers on vacation cancellations, noting “it’s happening in real time right now.”
Palm Springs Mayor Ron deHarte said he’s received a couple letters from Canadian visitors saying they would not return to the desert because they were disappointed by tariffs against Canada. But he doesn’t know how widespread that is.
The Washington Post on Sunday published letters from some of those snowbirds who are choosing to feather their nests elsewhere this year. Most of the letters are characteristically polite, despite the boycott.
