SAN DIEGO (KGTV) — President Trump's tariff hikes on imported steel and aluminum could significantly impact San Diego's military sector.
David Boone is the president and CEO of the San Diego Military Advisory Council. He said there will likely be two impacts: one on contracts already awarded and one on future contracts.
"During COVID, the increase in cost caused by the supply chain issues over a period of like three years, the military would not recognize those price accelerations caused by COVID. I would suspect a similar situation where contractors that already have awarded contracts, that they will have to eat those costs, and it will be substantial," said Boone.
Contracts that haven't been awarded will be able to factor in the cost of the tariff.
"The cost impact will move to the government and the taxpayer, so the taxpayer will end up eating that cost," said Boone
The president has said increasing tariffs will level the playing field of international trade and bring manufacturing jobs back to the United States.
Boone said that's complicated, especially in San Diego.
"You don’t just snap your fingers and create manufacturing capability. You have to invest in the infrastructure; you have to have the human capital," said Boone.
Attracting that "human capital" in San Diego can be a challenge.
"The odds of developing manufacturing capability is not great, particularly in our region with the cost of living. We’re struggling with wage-grade workers because they can’t afford to live here, and they’re migrating to other states," said Boone.
"I think there are a lot of challenges that haven’t been thought through very well that will negatively impact both our country and our region," said Boone.
