Mark Sanchez: This is the theme of the day, tariffs. We saw President Trump hit Mexico and Canada with 25% tariffs that were supposed to take effect today. He had a couple of phone calls with the Canadian Prime Minister and the Mexican president. They promised to do more to control the border and heighten security along the border to stop the flow of immigrants and illicit drugs. So that led the president to say, let's put this on hold for 30 days. That in a nutshell, is what has happened this week. Yet there's this cloud now. If there's one thing in 30 years of business writing I've learned, it's that CEOs, business leaders, lenders, bankers, corporate leaders, they hate uncertainty. They can say, give us the rules, we'll live with what you have, but this constant changing uncertainty is something they really, really don't like. And some of this shows up in the annual survey that Paul Isley there at Grand Valley State University's Seidman College of Business does each year to put together a forecast for the coming year here in West Michigan. And, while there's maybe not a direct link. He said, tariffs and the threat of tariffs at that time when he did the survey in the weeks after the election did play a role in some of these responses. And basically, he says the tariffs have folks worried. And it contributed to nearly 40% of the respondents in the post-election survey who told him that their company is planning to reduce or put off hiring new employees this year. That of course plays into the overall economic performance of the region. And in Paul Isley's words, we are already having fallout from tariffs. Even though the president put them on hold for 30 days, they're already affecting the economy. And of course, if this can't get worked out and these tariffs do take effect, there are consequences across the economy, especially for the auto industry here in Michigan. This is a global industry and a global economy where automakers source parts and components from all over, from Mexico, from Canada. You have, I think, three or four large assembly plants in Ontario. So, you have components coming across and going across the border all the time. And these tariffs are going to add significantly to the cost of a vehicle. Cost goes up. Folks don't buy vehicles. That could certainly really kick the Michigan economy pretty hard depending on what happens. There are other ramifications. You look at the housing industry and timber coming in from Canada. That's going to push up the cost of housing. You know, in the story I had this week on Crainsgrandrapids.com we also talked a little bit about the office furniture industry. That's key here in West Michigan. Has been having some tough times here the last few years, pulling out of and recovering from the pandemic and all the closures during that period four or five years ago. If this uncertainty lingers and this affects the economy, boy, the first thing corporations do when they have uncertainty is they pull back their capital spending. That means they're not buying cubes, they're not buying desks, they're not buying office chairs, they're not buying the panels, they're not buying all those products that Miller-Knoll, Hayworth Steelcase, and other companies make. So that could affect that industry. So, it's a game here. It's...it's that trade-off of doing what you have to do to get leverage to better secure the border versus what are the effects and the pain that's going to be caused on the economy. And one of the economists I did talk to this week, a gentleman from Commerce Bank, he believes this is all part of more of trying to gain leverage to negotiate better trade agreements that he had put into effect in his first term with Canada and Mexico. So, this is something definitely to keep an eye on because if these tariffs do come, and we saw some retaliatory tariffs China imposed this week as well in response to the 10% tariff on China imports going into this country from China. So, if these tariffs on Mexico and Canada do take effect, there's going to be some real serious ramifications for the economy in some of these industries here in America.
Patrick Center: We talk about those tariffs and industries, the ag (agriculture) industry also impacted by tariffs, but also some of the immigration policies that we are seeing come online.
Mark Sanchez: Sure, sure. And this is a story my co-worker, Abby Poirier, did this week as well, just talking to some folks who are certainly paying attention to this issue. The Immigration and Customs Enforcement agents are doing audits. ICE is out and it's about. And basically, for Michigan farms and companies that employ immigrants, they're scrambling to prepare for closer scrutiny on their workforce as the administration begins to make good on promises to deport undocumented workers. The basic advice is to make sure your documentation's in place. Businesses that do employ undocumented workers and immigrants can be subject to fines and up to six months in prison. And there's this American Immigration Council that says Michigan has about 687,000 immigrants. Of that population, about 12.8% are undocumented. So, if you're a farm, an ag producer, a grower, or a company employing migrant workers and immigrants, make sure your documentation is up to speed. Make sure you're taking a look at the documentation, make an effort to verify it, make sure it's legitimate because if ICE comes knocking on the door and you don't have this documentation and you can't prove that you made a good faith effort to check it, this could lead to a little difficulty for you.
Patrick Center: We're talking with Crain's Grand Rapids business staff writer, Mark Sanchez. This is the time of the year when we reveal the economic forecasts for 2025. It's interesting now with the uncertainty of tariffs floating and when these surveys were taken, but West Michigan executives are increasingly optimistic in the regional economy.
Mark Sanchez: Yeah. And this is again, the GVSU Seidman College of Business Survey that it does with the Grand Rapids Area Chamber of Commerce for companies in Kent, Ottawa, Muskegon, Allegan counties. And this was begun a week after the election. So, the results are post-election and how that's fit into what folks are saying. And basically, the results show that for 2025, folks are feeling pretty positive out there with modest growth projected for locally privately held companies. And overall things are looking relatively okay. Now, obviously there are some things in the equation to continue keeping inflation under control. What effect will tariffs and possibility of a trade war have on the economy, especially those industries we mentioned earlier that are key here in West Michigan. But overall, the business leadership responding to the GVSU survey back late last year suggested that they were feeling pretty good. There's a projection for about 1.25% growth in the unemployment in the region this year. That's a solid, solid number. The region grew about 0.5% last year, so that's better. And bottom line, folks are feeling the business leadership out there is feeling relatively well, relatively positive about where the economy of this region's going.
Patrick Center: Crain's Grand Rapids Business Staff Writer, Mark Sanchez, thank you so much.
Mark Sanchez: Thank you, Patrick.