Here come the tariffs

Sometimes, I feel like we are living an experiment. I still feel new to being retired, and it often seems like I’m figuring out how to settle into this way of life. I seem to be very busy. I have lots of projects in progress. I wake up with things to do and places to go. I’ve made some new friends and taken up a few new activities.

There is still a lot to learn about the place where I live. I have lived near the Canadian border before. Montana, North Dakota, and Idaho reach the 49th parallel. However, we not only live in a border state here but also in a border community. We can see Canadian islands from the shore of our bay. I can ride my bike to the border crossing, though I’ve never attempted to cross the border on a bicycle. The border crossing, just a few miles from our home, is the third busiest crossing between the two countries.

When Taylor Swift ended the Eras Tour with three nights of performances in Vancouver, the lines of cars waiting to cross the border backed up traffic enough to create gridlock in the tiny town of Blaine. I don’t know what I expected, but I was surprised that a concert could cause such confusion.

Over the past few weeks, we have noticed a steady stream of auto transport trucks unloading vehicles at a large lot a couple of miles from our home. The cars are packed into the ten-acre area. Truck traffic around a warehouse complex that we pass on our way to the interstate highway has also been heavier than usual. One local trucking company has trucks that have recently made two or three trips to Canada every day. The local newspaper reported this week that all of the warehouse space in the area is filled with freight from Canadian companies.

We are used to a lot of trade between the two countries. Most days, about a third of the cars in the Costco parking lot sport British Columbia plates. Canadians have to do a fair amount of calculating when considering purchases in the US. The Canadian dollar is very weak against the US dollar. Fuel prices are lower on our side of the border, but Canadians have to figure out both quantities and exchange rates. Fuel is sold by the liter in Canada and the gallon in the US. Right now, a Canadian dollar is worth about 70 cents in the US. The use of bank cards makes currency exchange on purchases easy. That means that people from Washington are going across the border to shop in Vancouver and take advantage of the exchange rate. Meanwhile, people from Canada come to Washington to take advantage of lower prices on some items.

What has changed since the US election is the uncertainty about tariffs. The threatened tariffs will go into place today. That might mean that those who have imported all the truckloads of goods before the tariffs going into effect made the right choice to get their goods into the US early. I don’t know how quickly the car lots and warehouses will empty, but presumably, the rate of imports will slow due to the tariffs.

There are other effects that one might not have anticipated. Point Roberts is a community in our county that is an isolated enclave separate from the rest of the continental United States. Residents of Point Roberts have to go through Canada to get to the rest of the county. That includes high school students who live in Point Roberts and attend public high school in Blaine. The only source of drinking water, sewage services, and domestic electricity for Point Roberts residents is purchasing those items from Canadian utilities. The specific terms of the tariffs are unclear, but I doubt that the US Administration has considered the effect of tariffs on Point Roberts homeowners. Homeowners will notice a 25% increase in utility costs.

We anticipate that the price of lumber will respond similarly to what occurred during the COVID-19 pandemic. At one point, when the border was closed, we decided that the farm couldn’t afford to buy any new pressure-treated fence posts because of high costs. We collected used posts from various sources and got by. We were relieved when lower prices returned, allowing us to do a fencing project last summer. Now, we’re bracing for lumber prices to go up again. Other items affected by the tariffs include groceries. Nature’s Path is an organic cereal company with operations on both sides of the border.

Tariffs don’t stand alone. Usually, there are retaliatory measures when they are imposed. We do not yet know how Canada will respond to US tariffs, but some potential responses could significantly impact cross-border families.

One of the things that I don’t yet understand is how the foreign trade zone under the Port Authority operates. Some items are exchanged duty-free, and other duties are deferred in a foreign trade zone. We can see the large BP Cherry Point oil refinery from our house, and several of our neighbors work there. Tankers carrying crude oil from the north arrive there regularly. Trains come and go from and to Canada as well. I can’t tell from watching the tankers whether they have come from Alaska or Canada. Coal from Wyoming on its way to Japan is shipped through the Port of Vancouver. Multiple coal trains cross the border every day.

The tariffs will significantly impact our community. Indeed, some importers anticipate a noticeable change. However, there seems to be a lot of uncertainty about what will happen. The tariffs imposed during the first Trump administration did not increase the number of domestic jobs or close the US trade deficit as promised. Those claiming expertise are as confused as the rest of us. Local folks are nervous about the confusion and have trouble understanding what will happen. It is difficult to tell how tariffs will directly affect individual families. I guess we’ll see what happens.

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