Cargo volumes at the Port of Los Angeles dipped by 5.4% in January compared to the same month in 2019, a drop that officials attributed to the lingering effects of the trade war and uncertainty from possible extended factory closures in China as the novel coronavirus continues spreading.
January is the fifth consecutive month the L.A. port has seen total cargo volume decline compared to the same time period from the previous year. Port of Long Beach numbers, meanwhile, were not yet available as of Friday afternoon, Feb. 7, but will likely reflect L.A.’s decline, officials said.
“We anticipated that tariffs would continue to impact cargo volumes as we moved into 2020, and our January volumes reflect that ongoing trend,” Port of Los Angeles Executive Director Gene Seroka said at the regular board meeting on Thursday, Feb.5.
The trade war began in July 2018, when the U.S. implemented tariffs on $34 billion of Chinese goods, four months after President Donald Trump threatened them and three months after China responded by announcing its own tariffs on $50 billion of U.S. goods. What followed was a tit-for-tat escalation in tariffs: In total, the Trump Administration implemented taxes on $360 billion worth of Chinese imports. China, America’s largest trading partner, responded with tariffs on $110 billion of U.S. goods.
But in mid-January, the Trump Administration announced a new deal with China that eased tensions.
The U.S. dropped plans to impose tariffs on an additional $160 billion in Chinese imports, and it cut in half, to 7.5%, existing tariffs on $110 billion of good from China.
But the agreement left in place tariffs on about $360 billion in Chinese imports, which the administration could use as leverage to generate future concessions.
China, meanwhile, has dealt with the burgeoning coronavirus outbreak. There have been 31,481 confirmed cases of the respiratory illness worldwide as of Friday, according to the World Health Organization, with all but 270 of those within China. The outbreak has caused the U.S. Coast Guard to require health reports on crew members aboard cargo ships coming into the Ports of Los Angeles and Long Beach; the U.S. has travel restrictions in place and multiple cruise ships globally have been quarantined because of the virus.
The closure of factories in China amid the outbreak combined, though, has not been the only factor affecting trade stability.
“The coronavirus, which prompted China’s Central Government to extend the Lunar New Year holiday,” Seroka said, “adds a new layer of uncertainty to global trade.”
The port moved 806,144 Twenty-Foot Equivalent Units in January 2020; TEUs are a universal measurement, though most cargo containers today are about 40 feet.
January imports, meanwhile, decreased 3.5%, to 414,731 TEUs, compared to January of the previous year.
While January numbers for the Port of Long Beach were not yet available yet, port spokesman Lee Peterson said that Long Beach’s statistics will be in the “same neighborhood of a reduction.”
While talks between China and the U.S. continue in an effort to fully resolve the tariff issue, the impacts will likely still be felt at the ports, officials have said in the past — though they’ve also said they could overcome the challenges.
“The port,” Seroka said, “is committed to collaborating with our customers and supply chain partners to innovate and adapt to new trade patterns.”
The Associated Press contributed to this report.
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