A new study, By the Numbers: Jeopardizing the National Benefits of Trade Through America’s Busiest Port Complex, conducted for the Port of Los Angeles shows tariffs threaten nearly 1.5 million U.S. jobs and more than $186 billion of economic activity nationwide. The study, released in November 2019, shows how much sales, income and taxes are at risk for every state due to tariffs, based on international trade through the San Pedro Bay ports of Los Angeles and Long Beach. It also shows the economic benefits of these imports and exports to each congressional district and identifies the percentage of activity burdened by tariffs.
Overview of the Importance of California’s Major Ports
The Southern California ports of the Port of Los Angeles and the Port of Long Beach are together the nation’s busiest container port complex and its primary gateway for waterborne trade between the U.S. and Asia. In 2018, these ports handled almost $380 billion of trade goods. This represents 22.4% of all U.S. waterborne trade and 42.3% of U.S. waterborne trade with Asia.
The L.A. port complex connects businesses and consumers across the entire nation to trading partners in Asia. 37% of all imported goods and 21.7% of all exported goods flow through the Ports, touching every state in the nation.
Because of this interconnection, trade through the L.A. port complex has economic impacts on a national level. There are 3 million jobs nationwide that are related to the trade moving through the Ports. Of this, nearly 1.47 million jobs are related to the cargo affected by tariffs. These jobs are tied to producing goods for export and moving them to overseas markets, as well as transporting, wholesaling, and retailing imported goods.
Impacts of the Tariffs on U.S. Economic Activity
Beginning in 2018, the U.S. proposed and imposed a variety of tariffs on imported commodities citing concerns over national security or unfair trade practices. In retaliation, trading partners have imposed or proposed tariffs on U.S. exports. Tariffs imposed by the U.S. are charged to the companies importing goods, not to foreign countries. Essentially, tariffs constitute a tax that importers, faced with higher costs, will either absorb or pass along to consumers in the form of higher prices.
On the export side, tariffs on U.S. exports raise the relative price of U.S. goods compared to the price of competing goods supplied by other countries. For example, a tariff on U.S. soybeans makes them more expensive to buy compared to Brazilian soybeans. This can lead foreign buyers to switch away from U.S. exporters, leaving U.S. exporters scrambling to find new customers or even face the prospect of a permanent loss of business in the global market.
“Tariffs are a tax on U.S. companies and consumers. Recent data from Tariffs Hurt the Heartland shows Americans have paid an extra $38 billion in tariffs because of the trade war—and that number is only getting higher,” said Jonathan Gold, spokesman for Americans for Free Trade. “While the administration continues to claim that China is paying the tariffs, it’s clear the real casualties are American businesses, farmers, workers and consumers. As the trade negotiations continue, it is imperative that both sides come to a final agreement that removes all tariffs.”
States with Greatest Number of Jobs at Risk:
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