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US ports to fall into a direct victim of trade war

(People's Daily)    13:50, August 01, 2018

US ports, handling hundreds of billions of dollars in merchandise each year, will be the first to be impacted if the trade war initiated by Donald Trump administration begins to slow the global economy.

As the White House threatens to impose higher duties on $200 billion worth of Chinese goods, US port managers are bracing for the prospect of canceled shipments and lost jobs after possible countermeasures to be taken by the Chinese government, a CNBC report said on July 29.

Statistics from the 328 official ports of entry maintained by US Customs and Border Protection indicated that, more than $505 billion worth of goods arrived from China last year.

Southern California ports handled $173 billion in Chinese imports last year, about a third of all goods shipped from China to the US.

Los Angeles/Long Beach Seaport, the Port of Chicago and the Port of New York are the largest three ports in handling Chinese imports, said US port management department. They respectively accepted $79 billion, $23 billion and $20 billion of Chinese goods in the first five months this year.

According to Descartes, a global leader in uniting logistics-intensive businesses, the Port of Los Angeles has handled a total of $250.3 billion worth of goods by the end of 2017, 61 percent of which came from the trade with China. The ratio was 31 percent in the Port of New York which loaded and unloaded $165.26 billion of products. 

Statistics showed that the China-related business accounted for over a quarter of the total trade volume for 16 out of the 20 largest ports in the US.

The CNBC report analyzed that the Trump administration’s tariff policy against China will place a comprehensive impact on major US ports. The west coast ports, especially the ports of Los Angeles and Long Beach are on the front lines of the trade war.

According to the annual financial report issued by the port of Los Angeles this April, these two ports have provided 190,000 jobs by the end of 2017. Besides, they have indirectly created 992,000 jobs for the Southern California and 2.8 million for the entire US.

"It would be a game-changer," said the executive director of the Port of Long Beach. "It would be detrimental to jobs at the port and detrimental to the state and national economy." 

He introduced that last year, trade with China accounted for $145 billion in imports and exports, over half of the Los Angeles ports' total. So any slowdown in China trade flow could bring layoffs, he added.

The ports of Los Angeles and Long Beach handle roughly 40 percent of US imports, and trade through the complex supports hundreds of thousands of jobs throughout the region, said the Los Angeles Times, adding that the escalation of the trade war may soon hit the warehouse workers and truck drivers in Southern California and bring on a rise in price for the consumers.

Last year, $173 billion in Chinese imports flowed through Southern California ports, said Jock O’Connell, an economist with Beacon Economics, elaborating that the largest categories of goods included electronics, furniture, toys and clothing.

He added that its exports to China totaled $18 billion, consisting of auto parts, cotton, scrap material and more.

The resulting price increase probably will force companies to purchase fewer Chinese products, said Paul Bingham, a trade expert with Economic Development Research Group, predicting that it will lead to a slowdown in trade and fewer hours for port-related workers.

“Longshore workers, with strong union protections, will fare better than most workers. But many truck drivers and warehouse workers are independent contractors or employed by third-party temporary help agencies and are especially vulnerable to a drop-off in trade,” the Los Angeles Times predicted.

A report issued by the Washington-based Brookings Institution this May revealed that Los Angeles rubber plants, Napa Valley wineries, as well as vegetable, fruit and berry farms in the Central Valley will be the first to be impacted in the trade war initiated by the Trump administration against China.

A total of 287,000 jobs in California are in businesses targeted by Chinese tariffs, 156,000 in Texas, and 154,000 in the State of Washington. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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