Port of Los Angeles Argues Against New Tariffs on Chinese Goods

TariffsIllustration. Source: Pixabay under CC0 Creative Commons license

Additional U.S. tariffs on imports from China could have a number of unintended impacts, the Port of Los Angeles said in a letter to U.S. Trade Representative Robert Lighthizer.

The potential impacts of proposed tariffs include higher consumer prices, lower profitability for American firms, and uncertainty in the maritime supply chain, the port said.

The Trump administration is mulling imposing a further 25 percent tariff on over USD 300 billion worth of goods imported into the U.S.

As the largest single gateway for waterborne containerized cargo entering and leaving the United States, the amount of Chinese cargo exposed to the tariffs would be more pronounced than at other gateways.

According to the port, the San Pedro Bay Port Complex handles approximately 40 percent of all containerized imports and 30 percent of all containerized exports for the United States. The cargo generates over USD 310 billion annually, the port noted.

Trade with China represents a large segment of this cargo (USD 202.6 billion in 2018) and the port’s analysis estimated that current and proposed tariffs would impact some 66 percent of all imports by value and 64 percent by both tonnage and container volume at the San Pedro Bay.

“Over the long term, the prolonged presence of tariffs on trade with China may cause American businesses to source materials and goods from other countries, which may result in shifting of trade volumes away from the U.S. West Coast and the Los Angeles trade gateway,” the port said in its letter to Lighthizer, calling on the trade representative to consider the potential impacts of additional tariffs on the Port of Los Angeles.

During a testimony before the U.S. Congress on June 20, Lighthizer said plans were in place for negotiators between the U.S. and China to restart conversations this week.

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