U.S. Ports Say Tariff Retaliation Could Cut Shipping Trade

Date: Monday, March 12, 2018
Source: Wall Street Journal

Officials at big U.S. trade gateways say they’re worried new restrictions on steel and aluminum imports could have sweeping impacts on industries that rely on those raw materials, paring back the flow of an even wider range of goods through ports.

Automobile and auto-parts manufacturers in the Southeast rely heavily on the Port of Charleston for importing components and exporting finished products, said Jim Newsome, chief executive of the South Carolina State Ports Authority. “To the extent that this might hurt car manufacturing, that’s not good,” Mr. Newsome said Friday. “Global trade has been a big benefit for our country, and anything that would slow that down I don’t think is good at all.”

Port authorities also expressed concern over possible retaliatory measures that could be taken by trading partners overseas. In a statement, Don Meyer, co-head of the Northwest Seaport Alliance—made up of the ports of Seattle and Tacoma, Wash.—said retaliatory actions could hurt the region’s agriculture and manufacturing exporters.

“As a state in which 40% of our jobs are tied to international trade, we are risking jobs and quality of life by levying blanket tariffs against some of our most important trading partners and opening the door to their retaliation.”

The NWSA port handled more than $6.8 billion in agricultural and forest product exports in 2016.

Jonathan Gold, vice president for supply chain and customs policy with the National Retail Federation, said in a statement that the tariffs will have an immediate impact on consumer prices, canceling out the gains from tax reform.

“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,” he said.

Some logistics operators behind North America’s vast, interconnected supply chains don’t appear deterred by Washington’s tough trade stance.

Illinois-based logistics operator SEKO Logistics expanded into Mexico this week, and Chief Executive James Gagne says the company isn’t fazed by slow-moving negotiations on resetting the North American Free Trade Agreement and suggestions.

“We will figure out how to navigate any relevant tariff or trade barriers that may come into play,” Mr. Gagne said in an interview. “Particularly in Mexico, Canada and the U.S., the interdependence and coupling of these economies is extraordinary. If there’s any interest by governments to try to decouple that for the satisfaction of a constituency, I must say I think it will be extremely difficult, at best.”

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