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Tariffs, trade war threaten US jobs, economy: study

21
Nov '19
Pic: Shutterstock
Pic: Shutterstock
Tariffs threaten nearly 1.5 million US jobs and over $186 billion of economic activity, a new study for the Port of Los Angeles shows. The potential risks are based on the impact of tariffs levied on cargo handled by the busiest US container port complex. The study shows the economic benefits of these imports and exports to each congressional district.

“Every urban, suburban and rural community across our nation benefits from imports and exports moving through the San Pedro Bay ports, and ongoing tariffs are putting those benefits at risk,” said Port of Los Angeles executive director Gene Seroka in a press release.

“Some regions and industries are already feeling the pain, and the damage to jobs, income and tax revenue could be crippling down the road,” he said.

“This study provides graphic proof that a trade policy relying on overuse of tariffs can rebound badly on America, causing more harm than good to our long-term economic health,” said Rufus Yerxa, president of the National Foreign Trade Council.

The study shows that tariffs imposed over the last two years could add additional costs—in the range of $31 billion to $35 billion—which are borne by consumers at the retail level and by US manufacturers, who rely on imported raw materials and components to produce American-made products.

Seroka said the implications are much bigger when you consider all US ports.

Cargo moving through the nation’s largest container port complex is valued at more than $380 billion, and the economic activity it generates—including more than 3 million jobs nationwide—is a bellwether for the health of the overall U.S. economy. Imports through the ports of Los Angeles and Long Beach flow to every state in the nation, and goods grown or manufactured in every state flow through these ports to reach global markets, predominantly Asia.

US-imposed tariffs have triggered retaliatory tariffs. The vast majority of US tariffs target trade with China, the world’s second largest economy and America’s largest source of imported products. China accounts for 54 per cent of imports and 29 per cent of US exports moving through the San Pedro Bay ports, based on value.

The effect is a threefold disadvantage for US businesses and workers, according to the press release.

First, import tariffs increase costs for US consumers and producers. Second, tariffs make foreign products cheaper to manufacture, putting US manufacturers at a cost disadvantage in the marketplace. Third, retaliatory tariffs reduce the demand for US exports, putting US companies and jobs at risk as foreign consumer markets look elsewhere for goods and products.

Cargo volumes at the Port of Los Angeles for October reflect these trends, marking 12 consecutive months of declining US exports, 25 per cent fewer ship calls, and a 19.1 per cent decrease in volume compared with October 2018.

The toll has been especially heavy on the US agricultural sector, with 26 per cent to 51 per cent of exports from all 50 states hit by tariffs, based on trade through the San Pedro Bay ports. The top 10 most vulnerable states are California, Illinois, Kansas, Nebraska, Iowa, Texas, Louisiana, Ohio, Arizona and Missouri.

Fibre2Fashion News Desk (DS)


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