U.S. ports, which handle hundreds of billions of dollars in merchandise each year, will be the first to feel the pain if the Trump administration's trade war begins to slow the global economy.
So, as the White House threatens to impose higher duties on $200 billion worth of Chinese goods, port managers are bracing for the prospect of canceled shipments and lost jobs.
"It would be a game-changer," said Mario Cordero, executive director of the Port of Long Beach, California. "It would be detrimental to jobs at the port and detrimental to the state and national economy."
As the nation's busiest gateway for Chinese imports, the ports of Los Angeles and Long Beach are on the front lines of the trade war with Beijing. Last year, Southern California ports handled $173 billion in Chinese imports, about a third of all goods shipped from China to the U.S.
Still, any widening of tariffs on Chinese goods would be felt by many of the 328 official ports of entry maintained by U.S. Customs and Border Protection where more than $505 billion in goods arrived from China last year. In addition, $130 billion in American made goods and commodities flowed through those ports to China every year, producing a trade deficit in goods of $375 billion.
Most economists agree that the Trump administration is misreading the impact of a trade imbalance, which they say produces no economic harm to the U.S. But the trade deficit with China has become a flashpoint for President Donald Trump and his supporters, who rallied behind the president in June when his administration unilaterally increased tariffs on some $34 billion in Chinese imports.
China immediately retaliated with its own tariffs on $34 billion in U.S. imports. The Trump administration countered that it is preparing possible tariffs on $200 billion more in Chinese goods. Last week, with no talks apparently underway between Washington and Beijing, the president said he was willing to slap tariffs on every Chinese-made product shipped to the U.S.
"I'm ready to go to 500," the Trump told CNBC, meaning $500 billion.
The immediate impact of such an action would be felt on port operators, shipping companies and the people who work for them. The ports of Los Angeles and Long Beach, for example, estimate they support nearly a million jobs throughout Southern California. Last year, trade with China accounted for $145 billion in imports and exports, over half of the LA ports' total of $284 billion.
So any slowdown in China trade flow could bring layoffs, Cordero said. It would also cut into the roughly $320 billion in local and state tax revenues generated every year by trade flows in ports across the country, he said.