Tariffs stirring fear at many US points of entry for imports
(AP) – To understand why the impact of President Donald Trump’s tariffs could be felt throughout the United States, consider this:
From the West Coast to the Great Lakes and the Gulf of Mexico, at least 10 percent of imports at many ports could be hit by new tariffs if Trump’s proposals take full effect, according to an exclusive analysis of government data by The Associated Press.
Ports and ground terminals in nearly every state handle goods that are now or will likely soon be covered by import tariffs. And port officials fear this could mean a slowdown in shipping that would have ripple effects on truckers and others whose jobs depend on trade.
Since March, the U.S. has applied new tariffs of up to 25 percent on nearly $85 billion worth of steel and aluminum and various Chinese products, mostly goods used in manufacturing.
“Tariffs are working big time,” Trump tweeted recently.
The president has argued that the tariffs will help protect American workers and force U.S. trading partners to change rules that the president insists are unfair to the United States.
At the same time, his administration is preparing to slap tariffs of up to 25 percent on an additional $200 billion in Chinese imports — many of them parts and materials U.S. companies depend on, along with consumer goods — after a public comment period ends Thursday.
These tariffs are the administration’s response to its charges that Beijing uses predatory tactics to try to supplant U.S. technological supremacy. Those tactics include cyber-theft and a requirement that American companies hand over trade secrets in exchange for access to China’s market.
U.S. manufacturers are beginning to respond to the tariffs. On Friday, Ford announced that it has abandoned plans to import a crossover version of its Focus compact car from China to the U.S. because of tariffs that took effect in July. Ford has already said it will exit most of the U.S. car business as it shifts sharply toward trucks and SUVs.
In New Orleans, port officials say a tariff-related drop in shipments is real, not merely a forecast. Steel imports there have declined more than 25 percent from a year ago, according to the port’s chief commercial officer, Robert Landry.
The port is scouting for other commodities it can import. But expectations appear to be low.
“In our business, steel is the ideal commodity,” Landry said. “It’s big, it’s heavy, we charge by the ton so it pays well. You never find anything that pays as well as steel does.”
The port of Milwaukee imports steel from Europe and ships out agricultural products from the Midwest. Steel imports haven’t dropped yet because they are under long-term contracts, said the port director, Adam Schlicht. But there has been “an almost immediate halt” in outbound shipments of corn because of retaliatory duties imposed by the European Union on American products.
Much of the corn, he said, “is just staying in silos. They are filled to the brim.”
Many other ports have been humming along and even enjoyed an unexpected bump in imports during June and July as U.S. businesses moved up orders to ship before the new tariffs took effect. That started with manufacturing goods and is now spreading to retail items for back-to-school and Christmas.
“Some of my retail customers are forward-shipping the best they can to offset proposed tariffs,” says Peter Schneider, executive vice president of T.G.S. Transportation, a trucking company in Fresno, California.
Port officials were encouraged by this week’s announcement that the United States and Mexico had reached a preliminary agreement to replace the North American Free Trade Agreement, hoping it might lead to reduced trade barriers. Canada’s participation in any new deal to replace NAFTA, though, remains a major question mark.
The port officials continue to worry, though, that Trump will make good on a plan to expand tariffs to an additional $200 billion in Chinese imports — a list that includes fish and other foods, furniture, carpets, tires, rain jackets and hundreds of additional items. Tariffs would make those items costlier in the United States. And if Americans buy fewer of those goods, it would likely lead to fewer container ships steaming into U.S. ports.
The impact will be felt keenly at West Coast ports like Los Angeles and Long Beach.
Los Angeles Mayor Eric Garcetti, relying on information from his port officials, said his port — the biggest in the United States — could suffer a 20 percent drop in volume if the additional $200 billion in tariffs are imposed against Chinese goods.
Jock O’Connell, an economist in California who studies trade, said he doubts a downturn would be so severe — that would match the slump that accompanied the global recession of 2008 — “but we will see a definite impact.”
Here are some of the key findings from the AP analysis:
® U.S. tariffs will cover goods that are imported at more than 250 seaports, airports and ground terminals in 48 states.
® At 18 of 43 customs districts — including those representing ports around Los Angeles, San Francisco, New Orleans and Houston — at least 10 percent of their total import value could be covered by new tariffs if all Trump’s proposals take effect.
® Retaliatory duties by China and other countries cover $27 billion in U.S. exports.
Eugene Seroka, executive director of the Los Angeles port, worries that “if tariffs make it too expensive to import, there will be an impact on jobs.”
Seroka and others don’t expect layoffs on the docks. Union longshoremen — whose average pay last year on the West Coast was $163,000, according to the Pacific Maritime Association, which negotiates for the ports — often have contract provisions ensuring that they are paid even if there’s no work. And there are fewer of them than there were a few decades ago because the advent of shipping containers has reduced the need for people on the docks.