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The Trade War Has Reached the Ports: Cargo Transportation and Related Jobs Are at Stake
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The Trade War Has Reached the Ports: Cargo Transportation and Related Jobs Are at Stake

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NEW YORK – September 1, 2018

An analysis by the Associated Press on import tariffs and freight volumes shows 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. This could lead to a slowdown in shipping, which would have ripple effects on truckers and others whose jobs depend on trade.

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.

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 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.”

Despite some successes Trump like the conclusion of a free trade agreement with Mexico, port officials continue to worry 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.

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.

Many drivers who deliver shipping containers from the dock to warehouses are independents contracted by trucking companies, and they don’t get paid if there is nothing to haul. Some might leave the profession, said Weston LaBar, CEO of the Harbor Trucking Association in Long Beach, California.

“It’s hard to retain drivers,” he said. “If we don’t have work for those drivers, we’re worried they will leave for some other segment of the trucking business or go into another business, like construction.”

Less shipping means less revenue for the ports — something that could limit their ability to pay for expansion and improvement projects, according to Kurt Nagle, president of the American Association of Port Authorities. He said U.S. ports are in the midst of a planned $155 billion in infrastructure spending from 2016 through 2020.

The current trade war was foreshadowed in January by steep U.S. tariffs on imported solar panels and washing machines. It exploded with the U.S. tariffs of 25 percent on imported steel and 10 percent on aluminum. Then came two rounds of duties targeting about $50 billion in imports from China — punishment against that country for pressuring U.S. companies to transfer technology and intellectual property to Chinese companies.

Along the way, China, the European Union, Turkey, Canada and Mexico imposed retaliatory duties on U.S. goods including farm products and Harley-Davidson motorcycles.

This week, the U.S. Trade Representative’s office finished six days of hearings on a plan to hit another $200 billion in Chinese imports with 10 percent duties. Trump has said that if China continues to retaliate he could eventually add tariffs on $450 billion in Chinese goods, nearly 90 percent of that country’s 2017 exports to the U.S.

The purpose of Tramps’ administration is not the raising of customs barriers in all directions, but the trade deficit reduction. And there are two options here: reduce the import by typing limits and fees, or to increase exports.

China, which in 2017 has a surplus in trade with US $375 billion in order to cut its own production, has decided to work towards negotiation about a possible increase in imports of goods and services from the US $200 billion in 2020. Experts have questioned these plans, reasonably believing that the trade deficit can be reduced only by $100 billion due to the supply of U.S. high-tech engineering products and energy, especially liquefied natural gas. Chinese airlines, for example, need to purchase 600 Airliners before 2020. In the current situation, they are likely to buy them from Boeing and not from Airbus. And Europeans will lose market share. It turns out that the reduction of the trade deficit of China and the United States will be at the expense of other States that were considered allies of the United States. The automobile and aviation industries of the European Union, as well as the electronics and semiconductor sector of Japan and South Korea, will suffer most. This will increase tensions in trade relations between the EU and other countries with China, whose orders for high-tech products will be redirected to American manufacturers. But it will also undermine Euro-Atlantic solidarity.

Experts agree that the Trump administration sacrifices future national interests for short-term economic benefits.

Author: USA Really