It Would Take ‘7 Vietnams’ to Replace Chinese Cargo Lost Through Tariffs, Says Port of LA
A new Port of Los Angeles report bears out the port's predictions that Section 301 tariffs on Chinese goods would raise consumer prices and cause other economic harm, Gene Seroka, the port’s executive director, told a media briefing Tuesday. The study found that “on an annual basis, on the goods moving through our port complex, an additional $31 billion to $35 billion U.S. dollars is attached to what you and I spend at the store,” said Seroka.
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The report also blamed the tariffs for a harmful “shifting in trade patterns,” validating another early port forecast, said Seroka. “Cargo emanating from Southeast and South Asia has grown by about 10 percent over the last 20 months,” he said. “But for every container we earn from a newly sourced origin, we’re losing two and a half containers from China.
It would take “about seven Vietnams” to make up for the business the port has lost from China, “and that simply won’t happen overnight,” said Seroka. “There are decades' worth of relationships that have taken place in order to provide for great sourcing, quality, environmental responsibility and so many other business requirements that you simply can’t shift supply chains overnight, and the report bears that out.”
The port estimates nearly half the goods that move through its complex “have tariffs attached to them,” said Seroka. “That simply puts at risk the more than 3 million jobs we have in the nation that are attached to the port.” Seroka isn't suggesting a tariff “leads directly to a layoff, but it does lead to underemployment,” he said. Less cargo means fewer jobs, he said.
“The cargo that traverses our port reaches each and every of our 435 congressional districts,” said Seroka. Tariffs aren't “a regional or local issue,” he said. “This truly is a conversation of national and international significance.” The port estimates that 42 districts in 22 states have suffered through “retaliatory tariffs” from China on 90 percent of their export cargo, he said.
Seroka thinks “we are now hitting a cliff of what these tariffs have done and the impact they’ve had on the Port of Los Angeles,” he said. Cargo volume through the port declined by “an amazing” 19 points in October sequentially from September, he said. October also marked “the unfortunate precedent” of 12 straight months of export declines “through the Port of Los Angeles, our nation’s largest gateway,” he said. The port urges the Trump administration to “cease all tariffs” and “give certainty back to business,” said Seroka.
The report shows “how harmful a high-tariff policy” can be to American producers and consumers and all industries that depend on trade, said National Foreign Trade Council President Rufus Yerxa. Since the administration began imposing the Section 301 tariffs in 2018, “we’ve raised tariffs on nearly 20 percent of U.S. imports, and average U.S. tariffs are at the highest levels that they have been in decades,” said Yerxa.
U.S. trading partners have shifted their commercial practices to the detriment of American interests, said Yerxa. “China has actually lowered tariffs on imports from other countries while it has raised tariffs on the United States.” Yerxa thinks tariffs are “now the biggest threat facing America’s global businesses,” in terms of their worldwide “competitiveness,” he said.