Categories: California Business NewsCalifornia State News

Cargo Traffic Decline at Southern California Ports Due to Tariffs

Cargo vessels at the California ports are experiencing a significant decline in traffic.

News Summary

A significant decline in cargo traffic at Southern California ports has been reported, largely attributed to President Trump’s tariff policies on Chinese imports. The Port of Long Beach has seen cargo volume decrease by about 35% to 40%, while the Port of Los Angeles reported a 31% drop. With no cargo vessels departing from China for San Pedro Bay in a twelve-hour window, the implications for local economy and employment are alarming, as the ongoing trade war threatens significant revenue and jobs.

California – A significant downturn in cargo traffic at Southern California ports has emerged, attributed primarily to President Trump’s recent tariff policies on Chinese imports. In an unprecedented situation, no cargo vessels departed from China for the San Pedro Bay Complex, which encompasses the Port of Los Angeles and the Port of Long Beach, within a twelve-hour window on Friday morning. This stark decline follows a mere six days earlier, when 41 vessels were scheduled to leave China for these major West Coast ports.

The imposition of substantial tariffs has made it increasingly expensive for American businesses to engage in trade with China, prompting a sharp decline in cargo volume. Since the tariffs were introduced last month, cargo traffic has plunged significantly, with the Port of Long Beach reporting a decrease of approximately 35% to 40% in cargo volume compared to regular levels. Concurrently, the Port of Los Angeles has registered a notable 31% drop in its cargo volume this week.

Other ports across the nation are also bracing for diminished cargo traffic. Notably, the Port of New York and New Jersey anticipates similar downturns in their operations, while the Port of Seattle reported zero container ships present on Wednesday, marking another rare occurrence since the pandemic’s onset.

In response to escalating concerns about the trade situation, US and Chinese trade representatives are slated to meet in Geneva to discuss avenues for de-escalating the ongoing trade war. The newly enacted tariffs feature a staggering 145% tax on most goods imported from China, alongside a 125% tariff on US exports to China. Recently, President Trump suggested a reduction in tariff rates with China to 80%, pending discussions led by Treasury Secretary Scott Bessent.

As the trade conflict continues, consumers are poised to encounter heightened prices or shortages of certain goods within the next month. Cargo originating from China once comprised 63% of the cargo volume at the Port of Long Beach, a significant reduction from 72% in 2016. Moreover, shipping giant Maersk has reported that cargo volume between the US and China has decreased by roughly 30% to 40% compared to baseline levels.

The CEO of the Port of Long Beach conveyed alarm regarding the stark decline in vessel traffic, highlighting that current figures exceed the lows experienced during the pandemic. There is a worry that if the trade issues remain unresolved, consumers may soon face empty store shelves. Forecasts for the coming weeks indicate a potential 44% decrease in vessel calls year-over-year for the week beginning May 4th, underscoring the looming economic impact.

The LA County Economic Development Corporation has issued warnings that these tariffs could jeopardize $500 billion in revenue for the region and endanger two million local jobs. Further assessments by the World Trade Organization suggest that the ongoing trade wars could drastically reduce US-China trade by approximately 80%, exacerbating economic concerns.

Amidst this turmoil, some companies are cancelling warehouse leases due to diminishing cargo volume, which may foreshadow job cuts in the near future. An economics professor noted that even if manufacturing relocates to the US, expected price increases will likely persist due to the inherent costs tied to production.

The Port of Long Beach serves as a pivotal component of the local economy, providing one in every nine jobs in Greater Los Angeles. As cargo traffic continues to dwindle under the strain of tariffs and trade disputes, the ramifications on both employment and economic stability in the region are profound and could be felt for some time.