Along with tariffs, LA port official warns of economic repercussions for businesses
The executive director of the Port of Los Angeles has expressed concern that imposing fees on Chinese shipping companies and vessels entering US ports — on the heels of new tariffs — could have economic repercussions.
A proposal announced on Friday by the Office of the United States Trade Representative would require vessels to pay millions of dollars in new fees each time they dock at a US port, a cost likely to be passed down to US importers and exporters through higher freight rates.
Gene Seroka, executive director of the Port of Los Angeles, told China Daily that the new fees and tariffs could create significant disruptions for businesses and workers relying on international trade.
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"We are hearing concerns from retailers, manufacturers, exporters, shippers and consumers alike," he said, adding "there is a lot of confusion and uncertainty".
"While there is merit in fair, rules-based trade and strategic tariffs on specific items, widespread tariffs and counter-tariffs will adversely impact the American economy," he said.
US President Donald Trump issued an additional 10 percent tariff on all imports from China starting Feb 4.
"Tariffs have been front of mind across the supply chain industry and for American consumers alike," Seroka said.
"Importers have been front-loading as a hedge against tariffs for months.
"January was our busiest start to the year ever in part due to tariff front-loading. Longer term, however, we will likely see cargo volume begin to decline."
He stressed the importance of engaging policymakers to ensure stability in trade relations.
"Our plan is to knock on every door in Washington, building relationships and emphasizing the value of the work that goes on in and around the nation's busiest container port each day," Seroka said.
"This port complex is tied to nearly a million jobs in the LA region and 2.7 million jobs in the US. We don't want to see any of those jobs disappear because of tariffs."
The Port of Los Angeles recorded the busiest January in its 118-year history, processing 924,245 20-foot equivalent units — an 8 percent increase over last year.
"A strong economy, along with importers bringing in cargo as a hedge against tariffs and ahead of Chinese New Year, were key factors," Seroka said at a recent media briefing.
Key partner
The effects of the tariffs are particularly being felt in the trans-Pacific trade, where the majority of cargo arrives from Asia, with China being a key partner. Seroka said the tariffs would affect a wide range of consumer goods.
"Coming from China — furniture, toys, electronics, household appliances — the gamut," he said.
Companies are having to adjust, he added.
"The impact of tariffs on negotiations between procurement executives and manufacturers in Asia is ongoing. Many companies are facing pressure to offer discounts or relocate production."
The increased demand for imports has led to lower warehouse vacancies and full trains to the US Midwest. Some analysts suggest that this anticipation of tariffs is contributing to inflationary pressures, reflected in rising consumer prices.
While the new tariffs create short-term disruptions, Ye Chun, president of the China General Chamber of Commerce Los Angeles, said the underlying economic principles of global trade will ultimately drive tariffs back to a reasonable level.
"The current tariff dispute between China and the US should be seen as a temporary issue," Ye told China Daily, adding the determining factor in the trend of globalization and deglobalization is the economic law governing industrial supply chains.
Post-industrial economies such as the US face high manufacturing costs and inefficiencies, making large-scale domestic production difficult to sustain, he said.
The US tariffs initially disrupted trade with China, causing supply chain shifts and raising import costs, Ye said. However, "as product prices rise and domestic reindustrialization efforts face challenges, trade will eventually return to a more balanced trajectory".
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Chinese businesses have been adapting since the initial wave of tariffs under the Trump administration. "I believe that after a brief period of difficulty, tariffs may actually become an external factor that stimulates further growth in China's manufacturing sector," Ye added.
Xie Jianhua, president of the US-China E-commerce Trade Association, emphasized the structural complementarity between China, home to seven of the world's top 10 ports, and the US, the largest consumer market.
"Decoupling and breaking links do not align with market rules," Xie said, citing the projected $690 billion bilateral trade volume for last year.
Xie also stressed the need for US-China collaboration in emerging industries such as green shipping and smart logistics.
"Only cooperation can accelerate the industry's low-carbon transition," he said.
