China and U.S.’ Tit-for-Tariff Feud Rocks Ports

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Los Angeles County’s twin seaports are closely monitoring a looming trade war between China and the United States that, if it spreads, could devastate the local import-export business.

Already reeling from a severe slowdown in international trade, the L.A. and Long Beach ports, which collectively handle more than $100 billion dollars in Chinese products each year, could ill afford to see relations sour with their top trading partner.

“China is such a huge trading partner that it could be very serious,” said Art Wong, a spokesman for the Port of Long Beach, where about 42 percent of the cargo either comes from or is destined for China or Hong Kong. “It would have a huge impact on the people who load and unload cargo; there would be less work for them as well as for truck drivers, warehouses and everyone.”

The conflict erupted after the United States, citing a jump in Chinese imports, announced Sept. 11 that it would impose stiff tariffs on Chinese-made tires for the next three years. China responded immediately by indicating that it would restrict U.S. imports of chicken, auto products and other items.

Spokesmen for both ports said the situation would have little immediate impact because the products involved represent such a small percentage of imports and exports.

Of the $56 billion in Chinese imports that came through the L.A. and Long Beach ports in the first half of 2009, they said, only about 1 percent constituted tires. The statistics are similar for exports: Of the $7 billion in products sent to China from the two ports during the same period, about 1 percent comprised auto parts, and considerably less than that was poultry.

The real danger, the port officials said, is the trade war spreading to other products.

If that happens, Port of Los Angeles spokesman Phillip Sanfield said, the result could “become a substantial trade issue coming through this gateway.”

Both Sanfield and Wong expressed hope that the burgeoning trade disagreement would soon be resolved in talks between the United States and China at the World Trade Organization an outcome that at least one analyst believes is likely.

“This is not atypical of the kind of trade disputes we’ve seen in the last several years,” said Paul Bingham, an economist with IHS Global, an economic forecasting firm based in Lexington, Mass. “The worry would be if there are any signs of escalation.”

The Port of Los Angeles, which handles about $240 billion worth of goods per year, is the busiest port in the country, followed by the Port of Long Beach, which does about $150 billion worth of business annually.

Both ports have been seriously impacted by the recession, reporting recent declines in traffic of 16 percent and 25 percent, respectively.

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