The head of the busiest U.S. port does not expect imports to soar after last week’s tariff truce between Washington and Beijing that temporarily lowered the duty to 30% from 145%.

“You won’t see a deluge of freight here at the Port of Los Angeles,” Gene Seroka, executive director of the port that is also No. 1 for trade with China, said in a briefing on Monday.

“What we’ll see is a little bit of an uptick in bookings in Asia,” Seroka said of reservations on cargo ships headed for the port. “We will not be caught off guard.”

That rise likely will be linked to importers scooping up cargo that was manufactured before the U.S. imposed the 145% tariffs last month, rather than to new orders that may not be ready when the 90-day reprieve closes, he said.

The Port of Los Angeles and the adjacent Port of Long Beach handle 31% of U.S. sea trade and are a barometer for U.S. economic activity. They handle everything from incoming toys, apparel and auto parts to outgoing raw cotton and pet and animal feed.

The coming volume uptick follows a sharp drop in bookings after the United States imposed on April 9 the 145% import duties on China – its largest marine trading partner.

It takes a few weeks for the effects to show up at U.S. ports, so May imports reflect the escalation to 145% tariffs.

During the first 15 days of this month, 74 container ships arrived at the ports of Los Angeles and Long Beach, 11 fewer than usual, according to data from Marine Exchange of Southern California.

“The May volume drop is likely to be substantial when we close the books on this month,” said Seroka, who added import volume dropped more than 30% in the first week.

Port of Long Beach CEO Mario Cordero said on Thursday he expected a more than 10% drop-off in imports in May.

Consumers drive retail demand that accounts for nearly half of container shipping volume.

U.S. consumers face an overall average effective tariff rate of 17.8%, the highest since 1934, according to a Yale Budget Lab analysis from May 12.

And, they are starting to see prices rise as importers pass on the extra cost of tariffs.

Walmart WMT, the nation’s largest retailer and the biggest user of container shipping, said it would raise prices starting at the end of May and would pare orders for goods shoppers will not pay more for.

That could translate into less selection in stores, fewer available parts at American factories and fewer jobs, the port leaders said.

“It’s clear that we’ll see a pullback in global trade,” Seroka said.
Source: Reuters