Madison Aument
For 91.9 KVCR News, I’m Madison Aument and this is Economics IE. Today, I’m speaking with Jackie Benson, an economist with Wells Fargo, about how economic policy under the new Trump presidency could affect the Inland Empire.
Um, well, Wells Fargo has compiled this 2025 annual outlook that's looking at how New Policy and Leadership could affect the US. So I'm wondering if you can first just talk about some of the bigger findings of the report?
Jackie Benson
So looking to next year, specifically, we kind of altered our forecast after the results of the presidential election. So the main thing that we're looking at in terms of policy changes are tariffs, and then things like tax cuts, lighter regulatory environment. So tariffs, we do expect, will tamp down on economic growth, you know, bringing it to a lower pace in 2025 than this year in 2024 whereas tax cuts, which we expect to hit in 2026 will have the opposite effect, you know, boosting people's incomes, boosting consumer spending and resulting in a higher pace of economic activity.
Madison Aument
Yeah, tariffs have been obviously a big topic of conversation since the presidential election, I'm wondering, because the Inland Empire relies really heavily on logistics as a source of jobs, a lot of those goods aren't from the US, though. I'm just wondering how these tariffs could affect the foreign goods that are being processed at Amazon facilities here in the Inland Empire?
Jackie Benson
So the stated purpose of tariffs is to make US-made goods relatively more attractive than foreign-made goods. So if that stated purpose is realized, that would mean less international trade and less activity happening at the ports of Los Angeles and Long Beach. So that would have negative implications for the Inland Empire and the warehousing employment, which frankly, has been a source of strength. Over the past year, I was looking into job growth in the Inland Empire, and whereas overall, it's been pretty weak, especially in interest rate sensitive sectors, jobs and warehousing have been quite robust.
Madison Aument
Yeah, so I mean, it sounds like you're saying potentially, this could make Amazon shopping a little more expensive, and then the consequences of that might be less Amazon shopping, and then less need for logistics employees, right?
Jackie Benson
So, if we look at what happened last go round, when Trump enacted tariffs during his first administration, the result was not less trade overall. It was a change in the mix up of where we import from. So we imported relatively less from China and relatively more from China's neighbors. You know, that may likely happen again, not affecting the overall throughput at the ports, but just the mix up of our trading partners. Now, why this time might be different is because the president during or the president elect during his campaign, decided that he instead wanted to enact across the board, tariffs on all US trading partners, if that is to be realized and we could see some meaningful density trade flows.
Madison Aument
That was Jackie Benson with Wells Fargo. Join us again next Monday for Economics IE. You can find this segment at kvcrnews.org/econie. Support for this segment comes from the Nowak Family. For KVCR News, I'm Madison Aument.
