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US ports fear they will be big losers in trade war

Tuesday, 25 September 2018 | 12:00

America’s ports are fearful that they will be big losers as the escalating trade fight between Washington and Beijing bites into business.

The anxiety is that tit-for-tat tariffs between the two economic superpowers will crimp shipments, denting port revenues.

Mr Kurt Nagle, head of the American Association of Port Authorities, called the state of play “concerning”, following the latest back-and-forth last week between the United States and China.

“The total amount of tariffs and international retaliation affect 10 per cent of the total trade in American ports”, or about US$160 billion (S$219 billion) in revenues, Mr Nagle said.

The various trade wars thus far have had a mixed effect, with some ports seeing sharp declines in some products, even as others report a surge in activity intended to beat the new levies.

The mammoth US economy is sustained by about 100 ports around the country that manage the flow of goods inward and outbound at points of embarkation along the Pacific and Atlantic Oceans, the Gulf of Mexico and the Great Lakes.

In the first six months of this year, the port of New Orleans saw a drop of about 350,000 tonnes of steel compared with the same period a year ago, a big hit for a flagship product that is used in a petroleum-focused region.

“It represents between US$3 million and US$5 million,” said Mr Robert Landry, vice-president of the Port of New Orleans. “For us it’s very big.”

Major sources of the steel include Turkey, China and South Korea. All but South Korea were affected by a 25 per cent tariff on steel imposed by US President Donald Trump this spring.

The New Orleans port also suffered a 10 per cent drop in aluminium imports, which were also included in the same tariff action, while retaliatory Chinese tariffs on poultry have hit those exports.

Meanwhile, with new tariffs looming in the US-China stand-off, the Port of Los Angeles has seen a surge in some products.

“In May, June and July, cargo owners tried to beat the volumes,” said Mr Phillip Sanfield, a spokesman for the port, for which China is a key market, accounting last year for about half its trade in total value.

But the acceleration earlier this year may not last after the US last week announced tariffs on US$200 billion worth of Chinese goods, a move quickly followed by the Chinese rebuttal to impose levies on US$60 billion of US goods.

Trade war fears are also a source of unease for port workers, particularly in areas like southern California where the ports of Los Angeles and Long Beach account for one in nine jobs.

There are about three million port workers nationwide.
Source: AFP

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