A new study conducted for the Port of Los Angeles indicates that tariffs threaten nearly 1.5m US jobs and more than US$186bn of economic activity nationwide.
The potential risks are based on the impact of tariffs levied on cargo handled by the San Pedro Bay port complex, which covers Los Angeles and Long Beach, the two busiest container ports in the US.
Gene Seroka, executive director at the Port of Los Angeles, said: “Every urban, suburban and rural community across our nation benefits from imports and exports moving through the San Pedro Bay ports, and ongoing tariffs are putting those benefits at risk.
“Some regions and industries are already feeling the pain, and the damage to jobs, income and tax revenue could be crippling down the road.”
The study found that tariffs imposed over the last two years could add US$31-35bn of additional costs which are borne by consumers at retail level and by American manufacturers who rely on imported raw materials and components to produce American-made products.
The vast majority of US tariffs target trade with China, which accounts for 54% of imports and 29% of US exports moving through the San Pedro Bay ports, based on value. The US-imposed tariffs have also triggered retaliatory tariffs.
Rufus Yerxa, president of the National Foreign Trade Council, stated: “The Administration’s imposition of tariffs as high as 25% has raised costs for everyday consumers of basic products such as food and clothing, home appliances and our ubiquitous iPhones.
“That’s bad enough, but they also cause untold damage to our most competitive manufacturers and farmers, rendering them less competitive at home and abroad as production costs increase and foreign retaliation shrinks their exports. It is now clear that a tariff war without sensible constraints is a lose-lose proposition for the vast majority of Americans.”
According to the port authority, import tariffs increase costs for US consumers and producers and make foreign products cheaper to manufacture, reducing the competitiveness of US manufacturers while retaliatory tariffs reduce demand for US exports.
Cargo volumes at the Port of Los Angeles for October 2019 reflect these trends, marking 12 consecutive months of declining US exports, 25% fewer ship calls, and a 19.1% decrease in volume compared with October 2018.
Angela Hofmann, co-executive director of Farmers for Free Trade, said: “If cargo traffic out of the San Pedro Bay ports is declining because of tariffs it means America farmers and ranchers are hurting.
“95% of the world’s consumers are overseas. But when tariffs cut off access to markets that are hungry for American livestock, grains, vegetables and other farm products, the economic pain reverberates from ports, to farms to Main Street businesses.”
The toll has been especially heavy on the U.S. agricultural sector, with 26% to 51% of exports from all 50 states hit by tariffs, based on trade through the San Pedro Bay ports.
Within the last year, exports of US animal products and feed dropped 10% year over year based on January through August of 2019 volumes.