Despite the announced pause by the U.S. on most of the so-called retaliatory tariffs, Port of Los Angeles Executive Director Gene Seroka said the economic upheavals are far from over.
With China now seeing a whopping 125% tariff imposed by the Trump administration, the impacts will be felt going forward, Seroka said.
“It’s a dynamic situation,” he said during the LA harbor commission’s Thursday, April 10, meeting. “It’s changing by the hour.”
And the markets, he said, “are taking a punch again today.”
The “whipsaw” effects from the economic turmoil on businesses and families, Seroka added, will also spread with proposed fees on China-linked ships visiting U.S. ports.
Small businesses will especially get hit, he said, noting that many larger suppliers have been able to ship goods early, filling U.S. warehouses and stores before the tariffs were set to go into effect.
“Small and mid-sized companies are the most vulnerable,” Seroka said.
The price of materials needed from Canada and Mexico, which have U.S. tariffs remaining in place, to help with L.A.’s rebuilding after the devastating fires, have “skyrocketed in the past week,” Seroka said. Some 50,000 were lost homes, he said.
“The cost to rebuild those lives and neighborhoods,” Seroka said, “just got very expensive with those tariffs.”
America’s farmers, meanwhile, “will be irreparably damaged,” he added.
From the breadbasket farms to exporters of U.S. walnuts and grapes, Seroka said, they are “going to be hit right in the nose as America’s consumers are going to get hit right in the wallet. The news isn’t good today.”
The Port of L.A., he said, still anticipates “at least” a 10% cargo decline in the second half of this year.
That will also translate into lost labor, including longshore workers, truck drivers and what he said are nearly 1 million jobs in the Los Angeles region — and 2.7 million across the country — that have some connection to the ports and supply chains.
One out of nine jobs in Southern California, he said, are tied to the ports.
“While I don’t see mass layoffs,” Seroka said, “work opportunities will slip down for many.”
Truckers used to hauling four loads of containers daily may be down to three. Longshore workers used to regular overtime, he said, “may have to go back to 40-hour workweeks.”
While business at the Port of LA generally “looks solid,” Seroka added, smaller ports across the U.S. will also be hit.
“Dry cleaners, corner grocery stores,” he said, “they all rely on those ports to be working.”
Retailers that need to order goods sometimes several months ahead will struggle with the uncertainty surrounding tariffs, Seroka said.
And consumers will feel it too, he said in a CNN interview earlier this week.
What he’s hearing from CEOs, Seroka said, is if the extra costs can be passed on the American consumer, they will.
Asked in that interview what he needs to see from the administration, he said, “We need a clear line of sight on what’s going to happen.”