The head of the Port of Los Angeles said Friday that officials remain apprehensive about proposed additional tariffs on Chinese products, emphasizing the burdens they could put on trade operations.
The Port’s executive director, Eugene Seroka, wrote a letter in response to an Office of U.S. Trade Representative proposal to modify and potentially raise tariffs already in place on China. The tariffs followed an investigation into certain acts, policies and practices the U.S. deemed China was involved with, including illicit transfers of technology, intellectual property violations and other trade practices.
“While we understand and support efforts to address unfair trading practices and create fair and equitable access to foreign markets,” Seroka said, “we remain concerned that the use of tariffs creates unintended impacts, including higher consumer prices, lower profitability for American firms, uncertainty in the maritime supply chain and the potential shifting of trade routes to the detriment of the Port and the Los Angeles trade gateway.”
A bill is being considered that was introduced by he White House that would implement $300 billion in tariffs on goods from China, with the option to implement up to 25 percent tariffs on all goods.
China accounts for a large portion of the L.A. Port’s business, Seroka said in his letter, with $202.6 billion in trade coming through in 2018.
“Based on the large share of Chinese trade handled in the San Pedro Bay, the amount of cargo exposed to … tariffs and associated retaliatory tariffs is more pronounced than other trade gateways,” Seroka said. “On the import side, our most recent analysis estimates the current and proposed tariffs directed at China will impact roughly 66% of all imports by value and 64% by both tonnage and container volume.”
Products on the list of proposed tariffs range from live animals to technology products.
The USTR office said negotiations with China to address what it said were unfair trade practices had been held since December and more discussions were planned.
“Shortly in advance of the last scheduled (negotiation), China retreated from specific commitments made in previous rounds,” USTR officials stated in the posting of the proposal. “China also has announced further retaliatory action against U.S. commerce. The United States and China intend to continue further discussions.”
Seroka said the Port’s analysis of additional tariffs did not include what costs could be passed on to consumers, but he said the uncertainty of them has affected operations, increasing imports to the U.S. as retailers wanted to ship their products before they went into effect.
January through April in 2019 saw a 27.4 percent drop in trade with China as compared to last year, Seroka said.
“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,” Seroka said.