XPost: alt.politics.trump, talk.politics.guns, sac.politics   
   XPost: misc.taxes, alt.fan.rush-limbaugh   
   From: completemorons@cagov.nuts   
      
   It's nothing new for businesses to agonize over cash flow, credit lines,   
   inventory, expenses and hiring.   
      
   But pencil in the heightened economic uncertainty created by the   
   on-again, off-again tariff negotiations by the Trump administration, and   
   some businesses are seeing red.   
      
   A panel of tariff experts tried to calm the nerves of nearly 100 people   
   who attended a business forum held May 28 at the Richard Nixon   
   Presidential Library and Museum. The event came just ahead of a judicial   
   order on Wednesday blocking Trump's tariffs before another court ruling   
   on Thursday let them stand, at least for now.   
      
   Attendees either wanted to know ways to skirt the tariffs or grumble   
   about when they might end.   
      
   Here's what the experts had to say about Trump's tariffs and how they   
   might affect Southern California. Their answers have been edited for   
   clarity and length:   
      
   When you're forecasting, how should we be factoring in tariffs?   
      
   Kevin Depew, deputy chief economist from RSM US LLP in San Diego.   
   The reality around tariffs, and you see this as a carry over from the   
   initial Trump tariffs in his first term, is that many were retained   
   throughout the Biden administration. I think it is no secret that when   
   you offer politicians a revenue stream, they're very reluctant to give   
   that up. What we're seeing now with the federal budget, there is this   
   10% threshold for tariffs - which is extraordinarily high - that is   
   providing some offset for the administration to push forward with   
   potential tax cuts at the same time. The other aspect to this is   
   inflation.   
      
   All of this is kind of coalescing into a perfect storm, combining to   
   create some significant headwinds in the economy.   
      
   For consumer goods, the profit margins can be very thin, and any kind of   
   tariffs immediately affects their cash flow. It affects their ability to   
   expand. These are the kinds of effects that we won't feel until the   
   second or third quarters.   
      
   We've kind of arrived at a moment of a weird paralysis in some   
   industries, where they can't make a decision about where to locate a   
   supply chain because they don't know what the underlying justification   
   for the tariffs are. It's a function of how long are we willing to live   
   with this. Maybe there are other paths to achieve these objectives that   
   don't put our economy in a state of uncertainty and chaos.   
      
   What impact are tariffs having on small businesses in Southern   
   California?   
      
   T.J. McCree, senior vice president in charge of commercial banking in   
   Orange County for Cathay General Bancorp. There are two camps. The   
   proactive camp is looking to reshore, or onshore, their suppliers to   
   limit the amount of exposure that they have to the tariffs.   
      
   Then we have the reactive group. They want to wait and see. They are   
   delaying some major repurchases. But they aren't kicking them down the   
   road for years. They're just trying to see if there's material change in   
   the cost of the goods from, let's say, March to May, and asking whether   
   there really is going to be a big delay or a big concern about the   
   tariffs in the long term.   
      
   There is a lot of volatility going on, and everybody would like to see   
   it stabilized.   
      
   It's a complicated time for small businesses.   
      
   Several months ago, under Cathay CEO and President Chang Liu, the bank   
   began looking at the bank's risk models and how they were being impacted   
   by tariffs. We wanted to know what's the impact of tariffs on our   
   clients? What do tariffs mean to their financial strength and   
   underwriting to the risk, so that it provides a clear view of the   
   business to the regulatory world?   
      
   We're looking at opportunities for clients to look at really what their   
   business needs are.   
      
   On a typical day, a client might have one or two containers that are   
   coming into the port, and it may cost $1 million in tariffs. Well, you   
   have to pay the tariff on those containers. If that's a 25% tariff, you   
   need to pay $250,000 on that $1 million. A lot of times, a business'   
   cash flow is not consistent with what the new tariff costs. You want to   
   make sure that the clients are aware that once the product has landed,   
   the tariffs are due.   
      
   Are tariffs an effective tool to level the playing field, and are there   
   other domestic sourcing for markets that we should be thinking about?   
      
   Christopher Schwarz, professor of finance with the Paul Merage School of   
   Business at UC Irvine. Tariffs are here in the short term. You have one   
   individual (Trump) who has sole control over the tariffs and, of course,   
   it's going to be very volatile. Last week (May 23), 50% tariffs were   
   imposed on the EU. That lasted for 43 hours, and it went back down, to   
   whatever it's going to be. I think questions about fair trade are very   
   valid. There have always been concerns about China. That is something we   
   should worry about it. But I'm not necessarily sure the tariff idea is   
   the best way to go about it.   
      
   There's one thing the markets hate, and that's uncertainty. We just add   
   more uncertainty every day. We have inflation. There's no output, and   
   valuations are very high. So the best opportunity to bring manufacturing   
   back to the U.S. is probably through automated manufacturing, or places   
   for whatever reason, the supply chain is already in the U.S. I don't   
   think labor is ever coming back.   
      
   I don't think the tariffs will do anything. Apple is better off paying a   
   tariff of 25% for iPhones made outside the U.S. than trying to make them   
   here. We're very expensive. Do we want people here to make $10 T-shirts?   
   That's a fundamental question.   
      
   If we had people make their T-shirts for $100, how many people would buy   
   them? We have this conundrum where I don't think you're going to see a   
   lot of movement of manufacturing back onshore. We don't have that many   
   people who can do the job right now, honestly - or want to do the job. I   
   don't think all of this talk of tariffs is going to move the needle that   
   much.   
      
   Ultimately, it's really hard to fix the trade deficit. If you want no   
   trade deficit with every country, then basically we're only going to   
   trade with countries that enrich us. One of the biggest risks of tariffs   
   is the erosion of the brand of the U.S.   
      
   Charron Ricks, director of brokerage product development with UPS Supply   
   Chain Solutions in Los Angeles, overseeing California and Nevada.   
   Shifting supply chains is not easy. It takes time. Really, companies   
   build supply chains around relationships. So, many businesses have to   
   find a new sourcing country and build that relationship, and make sure   
      
   [continued in next message]   
      
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    * Origin: you cannot sedate... all the things you hate (1:229/2)