US ports fear tar­iffs could re­duce ship traf­fic and jobs

Manteca Bulletin - - Local/state -

OAKLAND (AP) — Ports and ground ter­mi­nals in nearly ev­ery state han­dle goods that are now or will likely soon be cov­ered by im­port tar­iffs. Port ex­ec­u­tives worry that this could mean a slow­down in ship­ping that would have rip­ple ef­fects on truck­ers and others whose jobs de­pend on trade.

The Associated Press an­a­lyzed gov­ern­ment data and found that from the West Coast to the Great Lakes and the Gulf of Mex­ico, at least 10 per­cent of im­ports at many ports could face new tar­iffs if Pres­i­dent Don­ald Trump’s pro­pos­als take full ef­fect.

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.

Trump said in a re­cent tweet, “Tar­iffs are working big time.” He 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.

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 backto-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.

Dwayne Boudreaux, an In­ter­na­tional Long­shore­men’s As­so­ci­a­tion of­fi­cial in Louisiana, said, though, that his steve­dores are han­dling about 10 per­cent less steel from Ja­pan be­cause of the new tar­iffs.

“We don’t think it’s go­ing to (get) worse,” he said. But, he added, “who knows — that could change from the next press con­fer­ence.”

The im­pact might be greater on truck driv­ers and ware­house work­ers. Fewer will be needed, ac­cord­ing to O’Con­nell.

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