Car Repairs And Custom Work Might Be More Expensive Now, Because Tariffs
Angelenos who rely on cars to get around already know that fixing your vehicle can be a pain. But it may have just got even worse.
That's because dozens of auto parts are on the long list of Chinese-made products subject to a new 10 percent tariff starting Monday.
Car batteries, spark plugs and brakes are just some of the items that could become more expensive under President Trump's largest round of tariffs yet, covering $200 billion worth of Chinese goods.
Wheels are on the list too. And that's bad news for Ultra Wheel, a 35-year-old Orange County company that makes sleek, custom wheels for the kind of enthusiasts who love upgrading their cars, trucks or off-road vehicles.
Lately, Ultra Wheel's Fullerton warehouse has been brimming with more boxes of wheels than usual. They've been stocking up before the new tariff gets slapped on everything they have coming through the Port of Long Beach.
"What we're doing is trying to bring in as many wheels as possible by Monday," said Ultra Wheel President Fred Dobler last week. "Which is tough, because everybody's trying to get containers out of the port."
Ultra Wheel currently has about 40 employees in the U.S. They used to have hundreds more, back when they made their wheels in Orange County. But about 15 years ago, in order to stay competitive on pricing, Dobler said they made the difficult call to transition manufacturing to China.
That decision now leaves Ultra Wheel right in the middle of an escalating trade war between the U.S. and China.
"It is going to hurt us," Dobler said. "Sales are probably going to go down. We may have to lay off people. And hopefully it doesn't close our doors."
Dobler said a lot depends on how long it takes for the two countries to resolve their trade disputes. If an agreement isn't reached by next year, the tariffs could jump from 10 to 25 percent. Ultra Wheel estimates the higher tariff would increase its annual costs by $8.6 million.
That "would put us out of business," Dobler recently told U.S. trade officials. "We can't absorb that type of cost with our current profitability."
Chris Kersting, president of a Diamond Bar-based trade association called the Specialty Equipment Market Association, said many other small businesses throughout Southern California could soon be in a similar position.
"We have in excess of 800 manufacturers just here in California who will be affected by these tariffs," said Kersting. "And those companies employ tens of thousands of Californians."
The Trump administration may be trying to bring manufacturing jobs back from China. But UC Davis economics professor Deborah Swenson said they're actually giving a leg up to companies that have outsourced to other countries like Mexico or Thailand.
"As long as you're facing competition that doesn't face the same tariff as you do, it's going to be very difficult for you to bring back the jobs to the U.S. and pay the higher wages that go with that," Swenson said.
Ultra Wheel president Fred Dobler is a Donald Trump supporter. And he likes the idea of bringing factory jobs back to the U.S. But he doesn't see that happening any time soon.
"This didn't happen overnight," Dobler said. "It'd be hard for us just just to pick up and come back, or go anywhere else."