The Port of Long Beach handled over 7.5 million units of cargo in 2017 and is poised to surpass that total in 2018. Recently implemented tariffs threaten to stunt the momentum seen in the first six months of the year.
The Port of Long Beach. Stock photo.

The Port of Long Beach is beginning to feel the heat from the United States’ trade war with China, and officials on Monday were warning that the latest round of tariffs could lead to higher prices for consumers just before the holiday season.

Long Beach reported an overall 10% drop in cargo volume for July, reflecting an ongoing decline this year. The port last year saw record high numbers for imports as many companies front-loaded cargo to get ahead of anticipated tariff increases.

In April, U.S. import taxes on $200 billion of Chinese goods jumped to 25%, from 10%, as President Donald Trump followed through on his threat to hike duties after he accused Chinese negotiators of backtracking in ongoing trade talks.

The president this month announced additional import tariffs on $300 billion worth of Chinese goods starting Sept. 1. The move has prompted retailers to warn of possible higher prices this holiday shopping season since the latest round of tariffs includes consumer goods like clothing, electronics and toys.

The twin ports of Long Beach and Los Angeles, which make up the nation’s busiest port complex, have been especially impacted, with overall cargo numbers surging in 2018 before dropping this year.

Port of Long Beach Executive Director Mario Cordero said trade war is hitting the West Coast hard, noting that about 70% the port’s imports come from China.

Cordero said U.S. exports also have been impacted, dropping nearly 50 percent since last year. There’s also the concern that jobs could be negatively impacted if trade is reduced. The Port of Long Beach supports an estimated 300,000 jobs in Southern California.

Port of Long Beach Cargo Numbers for July

“There’s a big uncertainty for the industry right now,” he said. “The goal here is for some type of resolution, because at the end of the day, nobody wins.”

If the tariffs continue as planned next month, Cordero said, American consumers could see higher prices during the holiday season. 

While July was a slower month for Long Beach, the Port of Los Angeles saw an overall 9% increase and a record-breaking month for cargo numbers. July imports increased 9% over the previous year, while exports dropped 4%.

“Despite the continued decline in exports and high level of uncertainty driven by trade tensions, we continue to optimize our facilities and are grateful for the support and confidence of our supply chain partners,” Port of Los Angeles Executive Director Gene Seroka said in a statement.

Cordero said the difference in numbers between Long Beach and Los Angeles reflects a historical fluctuation for the two competitors. While both ports saw record increases last year, for example, Long Beach had an overall 7% increase in cargo, while Los Angeles saw a 1% increase.

Though the twin ports have been impacted, Cordero said he’s optimistic that business will continue to grow. The Port of Long Beach, he said, is continuing to work on its 311-acre Middle Harbor Terminal Redevelopment Project, which will add an annual capacity of 3.3 million TEUs (twenty-foot equivalent units). The increased capacity would rank Long Beach as the nation’s fourth-busiest port.

“The most imprint trade route in the U.S. is the transpacific trade route,” he said. “We look forward to having a very promising future.”

The Associated Press contributed to this report.