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Port of LA Executive Warns of Tariff Impact

Port of LA Executive Warns of Tariff Impact

Almost a quarter of the Port of LA’s future volume is under threat because of the US-China trade war, according to the Port’s Executive Director Gene Seroka.

Speaking to CNBC, Seroka warned that tariffs could have a detrimental effect on 25% of the Port’s laden cargo, potentially causing a backlog of containers from Los Angeles to New York.

When asked about how badly the Port could be affected, Seroka said: “We’re estimating that about 25% of all of our cargo could be affected by the tariffs.

Lisa Wunder discusses how air pollution is being reduced at the Port of Los Angeles in a recent Port Technology technical paper

“That would be containers lined up from LA to New York and back.”

On August 9, 2018, the United States Trade Representative (USTR) finalised tariffs on almost $16 billion worth of Chinese goods, in response to what it called “unfair trade practices”.

This followed the first round of tariffs in March 2018 on imports of Chinese steel and aluminium, which prompted like-for-like tariffs on the US.

A further $200 billion worth of tariffs are due to come into effect on September 6, 2018.

 

 

Speaking further about the effect of the tariff war, Seroka added: “50% of our nation’s imports goes into manufacturing. Our business doesn’t handle uncertainty very well and everybody is moving to get ahead of this curve.

“For the next couple of months we see the volume remaining strong, but if this goes on then we’re likely to see a lighter fourth quarter than we’ve been used to.”

The Port of LA is the busiest container port in the US and handles $284 billion worth of cargo a year, 18% of all the cargo in the US. It receives $134 billion worth of imports from China every year and exports $11.2 billion.  

July 2018 was the busiest July ever for the Port, and its fourth best month ever as it handled more than 833,000 TEU. Its volume in the first two quarters of 2018 is 2.6% lower than it was in 2017, when it set an all-time record.

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