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Experts warn tariffs and retaliatory measures could raise consumer costs and hit California exporters
Summary
University and policy experts told a California Assembly committee that tariffs already announced could add roughly $1,200 per household and that retaliation and supply-chain effects threaten export jobs, agricultural producers and construction costs.
University economists and policy experts told the Assembly Committee on Economic Development, Growth and Household Impact that recent and potential future tariffs could raise consumer prices, disrupt supply chains and displace jobs in export‑dependent industries.
"By one estimate from the Peterson Institute for International Economics just the tariffs already announced on China, Canada and Mexico will cost the typical US household about $1,200 a year," said Katie Russ, professor of economics at the University of California, Davis. She told the committee that the $1,200 figure is a baseline and that broader or reciprocal tariffs could produce substantially larger costs.
Russ and other panelists explained three transmission channels for tariff effects: higher import costs passed through to consumer prices, retaliatory measures that reduce demand for California exports, and supply‑chain disruptions for inputs used in manufacturing and construction. Russ cited risks to industries that rely on imported inputs, including healthcare, aerospace and electronics, and said tariffs could also raise construction costs through higher prices for steel, lumber and other inputs.
Legislators asked about timing and who is likely to be affected. Russ said price pass‑through can appear quickly for certain goods, while employment effects in export industries can lag months to a few years. She and other panelists urged state readiness to expand food assistance and other supports if price increases materialize, and to consider temporary supports for farmers and regions experiencing concentrated export losses.
Brian Euler of the Legislative Analyst's Office told the committee that California exports support roughly 600,000 jobs and account for nearly 5% of state gross domestic product; panelists emphasized that most California exporters are small and medium firms and therefore potentially vulnerable to retaliatory actions.
Committee members signaled interest in tracking tariff pass‑through to consumer prices and in partnering with panel experts to quantify county‑level or commodity‑level impacts. Several members asked staff to follow up with detailed price and expenditure data and to explore options to supplement federal aid for agricultural producers who might not be fully compensated in past programs.
