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Tariffs To Hit About One-Fifth Of Cargo Traffic At San Pedro Bay Ports

Tuesday, 25 September 2018 | 20:00

As much as 23% of cargo moving through the Port of Long Beach and more than 20% of cargo at the Port of Los Angeles stand to be affected by tariffs on $200 billion worth of Chinese imports announced by the Trump administration on September 17, according to port representatives.

The 10% tariffs are in addition to 25% tariffs on $50 billion worth of Chinese imports enacted earlier this summer. Shortly after those were enacted, the Chinese government responded with in-kind tariffs against American exports to its country.

Mario Cordero, executive director of the Port of Long Beach, said the port had anticipated the new tariffs, as Trump had previously threatened them. However, he noted that originally Trump had proposed 25% tariffs on $200 billion worth of Chinese imports, rather than 10% tariffs.

But in the official tariff announcement, Trump stated that he would consider increasing the tariffs to 25% if the Chinese government did not act to change its “unfair” trade practices. The president has taken issue with the trade imbalance between China and the United States, as well as what he has characterized as China’s flagrant practice of stealing American intellectual property.

“I believe there will be an impact because we are now at a level of tariffs that are going to apply to a number of commodities across the board which will, in this particular case, come down to the American consumer in terms of additional cost,” Cordero told the Business Journal. “It’s concerning. On the other hand, there is some relief, so to speak, in that the administration has specifically referenced 300 commodities that have been exempted from this particular tariff application.”

Prior to the announcement of additional tariffs, Cordero had forecasted that the Port of Long Beach would exceed overall cargo volumes compared to last year. “Our forecast right now is we are going to continue with positive growth. . . . I’ll stick to that forecast, but we will see what the impact of this latest application of tariffs will have,” he said.

“More than 20% of the total trade value at the Port of L.A. is exposed to the tariffs, meaning that 20% of the items coming into the port from China would be exposed to those tariffs,” Phillip Sanfield, director of media relations for the Port of Los Angeles, told the Business Journal. “That equals about $43 billion of trade value or about 1.4 million container units.”

Sanfield continued, “Our position in general on the tariffs is the port supports effort to engage our training partners abroad to create a rules-based investment system that provides fair and equitable access to foreign markets for U.S. businesses.” In other words, he explained, negotiated talks or settlements instead of tariffs are the best course to resolve trade issues without causing instability.

Cordero reflected, “One of the things that is coming is the holiday shopping season. That’s going to be a true measure in terms of what this impact is, because, ultimately, our economy is based on consumer demand, in large part. So we will wait to see what the consumer answer is.”

If China retaliates, Trump stated that he would impose tariffs on $267 billion of additional Chinese imports.
Source: Long Beach Business Journal

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