LOS ANGELES (CBSLA) – The increase in tariffs on Chinese goods could have a significantly negative economic impact on the Port of Los Angeles, its chief reported Tuesday.
The port had a record year in 2018 when it moved 9.5 million twenty-foot equivalent units (TEUs), the highest container volume ever for a seaport in the Western Hemisphere. In July, it set a single-month cargo record, moving 912,000 TEUs.
Port of L.A. Executive Director Eugene Seroka, however, said the recent swell of total imports may have been spurred by fears of tariffs being placed on Chinese goods, and could be indicative of slowing business with the country in the near future.
On Sunday, an additional 10 percent tariff went into effect on about $300 billion in Chinese imports.
“What you would normally see in an economy like this, especially in Southern California that’s been so strong since the recession, you’d see folks really investing in the future, and that’s just not happening here,” Seroka said. “People are just generally pensive about what the future may hold.”
More than half of cargo that comes into the port – 55 percent – has a tariff or tax on it, and 98 percent of Chinese goods have tariffs, according to Seroka. He added that the notion that China’s government and businesses are paying for the tariffs is “unequivocally false.”
“If companies absorb these costs, (they’re) going to have limits on hiring … and they’re not paying attention to job expansion, and secondly they’re not paying attention to capital investment,” Seroka said.
China and Hong Kong were the port’s biggest trade partner last year, accounting for $153 billion in goods. The Port of L.A. employs about 148,000 people, and the Port of Long Beach employs another 42,000.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)