The producers of the Global Port Tracker–the National Retail Federation and Hackett Associates–said Friday that a potential trade war will threaten cargo imports, jobs and the infrastructure at the nation’s major container ports.
Imports at the nations’ major retail container ports are expected to dip slightly this month, though as a result of annual factory shutdowns in Asia for Lunar New Year, not the new tariffs on steel and aluminum imposed this week by President Trump.
However, NRF and Hackett warned that those metal tariffs, as well as others, could eventually have an impact on the ports.
“With steel and aluminum tariffs already in place, new tariffs on goods from China being threatened and the ongoing threat of NAFTA withdrawal, we could very quickly have a trade war on our hands,” Jonathan Gold, the NRF’s vice president for supply chain and customs, said. “The immediate impact would be higher prices for American consumers that would throw away the gains of tax reform and put a roadblock in front of economic growth. But in the long term we could see a loss in cargo volume and all the jobs that depend on it, from dockworkers on down through the supply chain.”
On Thursday, Trump ordered a 25 percent tariff on imported steel and a 10 percent tariff on aluminum entering the country, claiming they were hurting those domestic sectors due to “unfair” pricing and trade policies by key foreign suppliers. The European Union has threatened to impose retaliatory tariffs on items like Levi’s jeans in response to the metal tariffs.
Canada and Mexico are reportedly exempt from the new tariffs, pending talks to renegotiate the North American Free Trade Agreement. On Friday, there were also reports that South Korea sought and was granted an exemption from the tariffs, possibly over its role in brokering talks between the U.S. and North Korea.
The seventh round of NAFTA renegotiation talks just concluded and only minimal progress has been reported. But tensions are high when it comes to trade with the U.S.
“A potential trade war would have a negative impact on cargo growth to the detriment of both the consumer and U.S. industry,” Ben Hackett, founder of consultancy Hackett Associates, said. “The likelihood of an increase in exports evaporates as well, killing off any chance for an improvement in the balance of trade.”
Meanwhile, ports covered by Global Port Tracker handled 1.73 million Twenty-Foot Equivalent Units in January, up 0.2% from December and 1.8% from a year ago. A TEU is one 20-foot-long cargo container or its equivalent.
February cargo imports were estimated at 1.66 million TEU, a 13.7% increase year-over-year. March is forecast at 1.53 million TEU, down 1.8% from last year and April at 1.7 million TEU, increasing 4.7 percent. Looking further ahead, May cargo imports are estimated to rise 2.5% to 1.79 million TEU, June shipments are forecast to ne up 4.7% to 1.8 million TEU and July is expected to see a 4 percent gain to 1.88 million TEU.
The February and March numbers are skewed by changes in the calendar for when Lunar New Year falls each year and Asian factories close for periods ranging from a week to a month.
The first half of 2018 is expected to total 10.2 million TEU, an increase of 4.1% over the first half of 2017.
Global Port Tracker covers the U.S. ports of Los Angeles-Long Beach and Oakland, Calif.; and Seattle and Tacoma, Wash., on the West Coast; New York-New Jersey; Port of Virginia; Charleston, S.C.; Savannah, Ga.; and Port Everglades, Miami and Jacksonville, Fla., on the East Coast, and Houston on the Gulf Coast.