The Trump administration's tariffs on Chinese goods and China's retaliatory duties could hit 15 percent of the shipments that flow through the Port of Los Angeles, a port official said.
Port of L.A. Executive Director Gene Seroka said the port conducted a preliminary analysis of the possible effects of a looming trade war with China, taking into account tariffs announced by both countries.
Because tariffs are a tax on goods, they have the potential to raise prices on consumer products and hurt the local logistics industry, a major employer in Southern California.
The ports of Los Angeles and Long Beach estimate that they support nearly 1 million jobs throughout Southern California. About 50 percent of the goods that flow through San Pedro Bay come from or head to China.
Seroka said the severity of the impact will depend on how companies respond to the higher costs. They could absorb them, pass them on to customers or find sources other than China. If they chose other sources, those goods might be shipped in somewhere other than Los Angeles.
"If goods are not moving the same way, yes, there will be an impact on jobs," he said.
For now, the port is preparing for a potential surge of cargo on the assumption that companies will try to rush shipments to beat tariffs.
A 25 percent tariff on $34 billion worth of Chinese goods is set to take effect July 6, as are Chinese retaliatory measures of the same value on U.S. goods.
The U.S. trade representative plans to impose 25 percent tariffs on an additional $16 billion worth of Chinese goods, and 10 percent tariffs on $200 billion more. The specific goods and the timing of those tariffs are yet to be determined.
Additionally, President Donald Trump has said the administration would impose tariffs on another $200 billion worth of goods if China retaliates again, as it has promised to do.
Add it all up and the potential U.S. tariffs on $450 billion of goods would hit about 90 percent of all Chinese imports to the country.
Seroka said the port's 15 percent estimate of goods affected does not include Trump's second $200 billion threat. The port estimated the effect of those tariffs by looking at the value of Chinese imports it handles. But it is operating with limited information. The Trump administration has yet to release lists of what products would be hit by the first $200billion round of tariffs, for example.
In announcing the first $34 billion in tariffs, the U.S. trade representative said the duties were needed to protect U.S. leadership in technology and fight China's alleged intellectual property theft, something various administrations have long complained about.
Trump has also blamed trade imbalances for hollowing out America's factories. Many economists disagree and point instead to automation as the main culprit.
