WASHINGTON — The impact of the U.S.-China trade war should be of concern to all U.S. ports of entry, Executive Director of the Port of Los Angeles Gene Seroka said at a panel at the National Retail Federation on Tuesday.
A report from the Port of Los Angeles found the U.S.-China trade war and current tariff lists threaten 1.47 million jobs and $186 billion in economic activity nationwide. In addition, the study found American marketshare, capital investment, research and development, and much-needed infrastructure upgrades are "at risk for every state due to tariffs."
"This study provides graphic proof that a trade policy relying on overuse of tariffs can rebound badly on America, causing more harm than good to our long-term economic health," Rufus Yerxa, president of the National Foreign Trade Council, said at the event.
In October, the Port of Los Angeles saw a 19.1% year-over-year decline in volume, marking 12 consecutive months of declining exports.
While some in the industry had hoped an end-of-year spike was coming as importers sought to beat a new round of tariffs on Dec. 15, Seroka said the port had seen little evidence that will be the case as, its analysis shows firms are still working through existing stockpiles.
"Our forecast for November is that it will be down an additional 10%," he said, "and December itself looks soft even with the supposed milestone of Dec. 15 tariffs on consumer goods looming."
Often called America's gateway, the Ports of Los Angeles and Long Beach handle not only imports and exports for California, but are connected to farmers, manufacturers and transportation providers across the country. Therefore, while they bear the brunt of the trade war now, the ripple effect is being felt nationally.
The trade war has been particularly difficult for the agricultural sector, Angela Hofman, Farmers for Free Trade co-executive director, said on the panel. "Keep in mind at the beginning of this [trade] war agriculture was headed toward a trade surplus of nearly $20 billion," she said, "And opening new markets and major markets like China and Asia are critical to the success of driving those markets, particularly in the Pacific Northwest and in California."
What has happened now, she continued, is retaliatory tariffs have disadvantaged U.S. agricultural producers to such a degree that their dominance in foreign markets is "getting very dangerously close to being irrevocably lost."
This phenomenon is happening across multiple industries, according to the panelists, because while the U.S. and China have been locked in a tariff war, and the U.S. has engaged in tariff disputes with allies such as the European Union, other countries have been negotiating free trade deals of their own and have become more economically competitive as a result.
"How do you plan for next year without knowing if you’ll have a market? [Businesses] don’t want to plan day by day, tweet by tweet; they want to plan years out."
Vice President, National Retail Federation
Firms have explored solutions such as shifting operations to Southeast Asia, namely Vietnam. "Cargo emanating from Southeast and South Asia has grown by about 10% over the last 20 months," Seroka said, "but for every container we earn, from a newly sourced origin, we're losing two and a half containers. It takes about seven Vietnams ... to make up for lost business in China. And that simply won't happen overnight."
When it comes to a Phase 1 trade deal with China, the panelists expressed skepticism about whether it would involve one-time purchases or address more substantive issues. All agreed, however, that tariffs would need to come off completely if American businesses were to have any certainty about investing in the future.
"How do you plan for next year without knowing if you’ll have a market?" Gold said. "[Businesses] don’t want to plan day by day, tweet by tweet; they want to plan years out."