Take a Dive in LA: Tariffs Send Port Activity Plummeting
Decrease in Traffic Expected at Port of Los Angeles Due to Tariffs
Ride the waves of change, as the Port of Los Angeles faces a tumultuous fortnight ahead, with import volumes set to plunge as much as 35%! This gloomy forecast comes straight from the horse's mouth — Gene Seroka, the port's Executive Director, who dropped this bombshell during a meeting with the Los Angeles Board of Harbor Commissioners.
Apparently, all shipments from China and Southeast Asia have effectively ground to a halt, resulting in a steep decline in arrivals. Wabtec Corp., a company that's always keeping tabs on port cargo, has predicted this slowdown to kick in as soon as next week. On that note, 17 vessels are due to dock, carrying 85,486 20-foot-equivalents (TEUs) of goods, marking a 28.6% drop from this week and a 10.5% dip compared to the same period last year. The following week, the situation is expected to worsen, with 16 vessels bearing 74,925 TEUs—a nearly 33% decline compared to the previous year.
The reason for this nosedive? Let's blame the tariffs! At an outrageous 145% on Chinese goods and a more moderate 10% across the board for other nations, such levies have been choking retailers' and manufacturers' demand for imports. In addition, President Trump's announcement of a 90-day pause on reciprocal tariffs may not be enough time for the industry to adjust, leaving major retailers teetering on the brink of depleted inventory reserves—a situation that promises to leave U.S. consumers and manufacturers scrambling for answers in the weeks and months to come.
Business
The Tariff Titanic: Trouble Ahead for LA's Trade Powerhouse?
Given its role as a linchpin of global commerce, Los Angeles' economy is particularly vulnerable to the damaging effects of tariffs, economists caution. With trade and logistics central to LA's prosperity, the coming storm could be quite rough indeed.
By and large, the drop-off in import volumes follows a brief surge during which companies attempted to beat the tariffs. Looking ahead, exports are likely to feel the sting even more sharply. In March, the port moved only 123,000 TEUs—15% fewer than in the same month the previous year—which represents the fourth consecutive month of decline year-over-year. The culprit is the combined bite of retaliatory tariffs that have taken a bite out of agriculture, heavy-duty manufacturing, and the information technology and services sectors.
What's more, China has been snapping up soybeans from Brazil in unprecedented quantities, thanks to favorable exchange rates and the absence of tariff barriers, which suggests that it's busy stockpiling alternatives to American goods.
The ripple effects of the slowdown are expected to make themselves known at the port, although Gene Seroka insists that mass layoffs should be avoided. However, for truckers and dock workers, it could mean reduced hours and reduced income, with casual workers feeling the brunt of the pain.
The port's gloomy outlook comes hot on the heels of a report released earlier this week by the Los Angeles County Economic Development Corp., which highlights how the tariffs threaten Southern California's critical trade and logistics industry. In 2022, this sector—which includes the Port of Long Beach, transportation workers, and the many warehouses scattered across the region—contributed $300 billion in direct economic output and $93.3 billion in tax revenue, not to mention supporting nearly 2 million jobs.
Business
LA's $300-Billion Tariff Threat: Sailing into a Perfect Storm?
In 2022, Southern California's trade industry bolstered an impressive $300 billion in direct economic output and contributed nearly 2 million jobs. But with Trump's tariffs looming large on the horizon, experts are warning that the industry may soon be in for a rough ride.
On Wall Street, stocks have surged after President Trump put a 90-day pause on tariffs for most nations, but Carol Schleif, the chief market strategist at BMO Private Wealth, suggests that this may be only temporary. As the tariffs may be ultimately negotiated down, anecdotal evidence is starting to emerge that indicates that some smaller and mid-sized retailers are cutting back on purchases, possibly in anticipation of the crucial holiday shopping season—even if the China tariffs are reduced.
As the waves of uncertainty continue to pound the shores of the Port of Los Angeles, it is clear that the road ahead will be anything but smooth. A sharp, short-term decline in import volumes compounded by the long-term risks of a global recession and slower growth paint a worrying picture. Let's hope for fair winds ahead!
More to Read:
- "I don't trust America." Trump's tariffs, detentions take a toll on local tourism
- Tariffs chill Southern California's vast industrial property market
- "It's going to hurt a lot." How L.A.'s importers are navigating Trump's shifting tariffs
- The Port of Los Angeles, a linchpin of global commerce, faces a potentially rough fortnight due to expected import volume drops of up to 35%.
- Gene Seroka, the port's Executive Director, announced this during a meeting with the Los Angeles Board of Harbor Commissioners.
- The decline in arrivals is attributed to tariffs, which have stifled retailers' and manufacturers' demand for imports.
- Trump's announcement of a 90-day pause on reciprocal tariffs might not provide enough time for the industry to adjust.
- The port's economy could be affected significantly due to tariffs, as LA's prosperity is tied to trade and logistics.
- In 2022, the trade and logistics industry in Southern California contributed $300 billion in direct economic output and $93.3 billion in tax revenue, supporting nearly 2 million jobs.
- Some smaller and mid-sized retailers are reportedly cutting back on purchases in anticipation of the crucial holiday shopping season, despite the China tariffs pause.
- A sharp decline in import volumes, combined with long-term risks of a global recession and slower growth, presents a worrying picture for the Port of Los Angeles.
