There's no such thing as 'local' and these Pacific Northwest industries prove it

The tariff landscape is constantly shifting, but one thing has remained consistent: the Trump administration's claim that tariffs will protect American industry and reshore manufacturing.

So, tariffs should be good for our iconic Pacific Northwest industries, right?

The truth is more complicated.

Even the most "local" businesses we associate with the Pacific Northwest rely on international trade to some degree — and they're feeling paralyzed by President Donald Trump's on-again, off-again tariffs. As of now, the so-called "reciprocal" tariffs on most countries around the world are paused until early July. But imports from Washington state's largest trading partner, China, are currently taxed at a higher rate of 145%. Meanwhile, a 10% flat tariff remains in place on most imports.

RELATED: Trump pauses most tariffs for 90 days

The tariffs, coupled with uncertainty, are squeezing local industries, like Alaskan salmon. That hyper-local Pacific Northwest product isn't immune to the fallout from a trade war. The fish may be caught here, but much of what ends up on the shelves takes a detour through China, where large processing plants filet and process it into products like smoked salmon and salmon burgers.

"I visited several of these processing plants, and there's, like, hundreds and hundreds of young women in white suits," said Gunnar Knapp, a retired University of Alaska professor who studied the fishing industry for decades. "It looks like a hospital facility, all lined up cutting fish.”

Under Trump’s proposed new tariffs on Chinese goods, that processed salmon would then be taxed when it re-enters the United States.

Trump campaigned on the promise to bring industrial production back to the U.S., creating jobs in the process. But asked whether tariffs could spark a salmon processing industry here, Washington state's chief economist, Dave Reich, was skeptical. He said unemployment is low in the U.S. and it's difficult to find employees to do this type of work. Knapp, also noted American workers aren't likely to line up to pick bones out of fish, if salmon producers could even afford them.

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"The idea that it makes sense to take salmon and send it all the way to China for processing and smoking, bringing it back, and all the transportation costs, just tells you how much more expensive it must be to just hire American workers to do that work," Reich said.

Salmon isn't the only Pacific Northwest staple that's surprisingly vulnerable to tariffs. The craft brewery scene could also take a hit.

The region is known for hoppy IPAs — a whopping 98% of America's hops are grown in the Pacific Northwest — but it's difficult to domestically source everything needed to sell those beers. Brewers are worried about the rising costs of imported aluminum needed to make beer cans, for example.

"I think the unpredictability of the current White House administration and the tariffs, that's the type of unpredictability that I don't like," said Raymond Kwan, co-founder of Lucky Envelope Brewing. "As a finance guy by trade, being able to forecast and predict things, such as, say, our cash flow, is really beneficial to the long-term success of our business. And not knowing what I'm going to wake up to tomorrow morning is probably the most frustrating and the scariest thing to be honest."

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IPAs may be the flagship product of the Pacific Northwest microbrew industry, but the scene has blossomed in part because it offers a diversity of beers.

That's the secret to Obec's success. Its flagship beer is a Czech pilsner, and it achieves its signature flavor using Czech hops and Bohemian barley malt produced the old-fashioned way. Obec co-founder and chief brewer Wayne Jehlik said those ingredients will cost a lot more in July if the planned tariffs on the European Union take effect.

"I am getting emails from pretty much every vendor we have saying, 'Buy now before the tariffs go into effect,'" he said. "Because it's not just the grains or the ingredients, it's any given thing that we do. And you start thinking, 'Oh, now everything's going to be more expensive."'

That's a fear shared by business owners in the local aerospace scene.

RELATED: For CEOs, 'unknown' and 'uncertainty' are the words of the hour with tariffs

The Pacific Northwest is home to a diverse ecosystem of aerospace companies orbiting Boeing, including Goodwinds Composites in Mount Vernon, Wash. The company makes carbon fiber products, like the legs on the Ingenuity helicopter that made test flights on Mars.

Goodwinds is able to source the resins and carbon fibers in its products from the U.S. but requires manufacturing equipment made in China, said owner Amelia Cook. She said she has equipment sitting in a Seattle warehouse, and she's waiting to find out if the tariffs on it will more than double the cost.

"It just makes the entire cost structure of expansion completely different, throws the whole risk category out the window," Cook said. "I just really don't know what I'm planning for at this point."

That paralysis is affecting businesses across the region, economist Reich said. From a business perspective, he said it makes sense to delay important decisions, investments, and hiring.

"You don't know what the future's going to look like, and you don't wanna get stuck making a decision today that, six months from now, looks really bad," he said.

RELATED: China projects defiance in its response to U.S. tariffs

But "delay" is not advice he likes to give as an economist. He said that's how recessions happen.

“Something scares all of us... the natural response is to pull back and say, 'OK, wait a second. I'm not gonna buy that refrigerator because my job may not be secure or whatever,'" he said. "Consumption falls, investment falls, and you have a recession.”

The situation in Washington state has a certain irony, Reich added. Before the trade wars started, our region was a bright spot in an otherwise bleak picture of American manufacturing. But local industry leaders now feel under threat by a tariff regime intended to protect them.

"In the U.S., we lost about something like 35% of manufacturing jobs between 1979 and now," Reich said. "If you look in Washington, it's only down 3% over that time period. We've actually maintained a manufacturing sector in the state."