The Toll of Tariffs

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The Toll of Tariffs
The Middle Harbor terminal project at the Port of Long Beach. (Photo by Ringo Chiu).

For the ports and countless other businesses that depend on trade with China, 2019 was a year to forget.

The escalating trade war between the United States and China was felt throughout the region, fueled by a rising number of tariffs on everything from appliances to furniture.

Perhaps hardest hit among L.A. businesses were the ports of Los Angeles and Long Beach — along with the many businesses that depend directly on the ports — and dock workers, who suffered drastic cuts in their hours.

The U.S.-imposed tariffs affected an estimated two-thirds of all consumer goods from China, many of which make their way into the United States through the San Pedro Bay ports.

Perhaps in an ominous sign, trans-Pacific trade plummeted in October, a month after one of the most expansive tariffs on consumer goods was implemented. When the data was announced, Port of Los Angeles Executive Director Gene Seroka said he was worried that the ports were on a perilous path.

Other industries were affected as well. Local manufacturers exported less in 2019 as overall shipments to China fell throughout the year.

Companies like Guess Inc. scrambled to adjust their supply chains in the face of rising costs for importing goods from the Asian nation.

Tariffs also ate into profits for companies like Manhattan Beach-based Skechers USA Inc.

Not long ago, China was considered an essential part of the supply pipeline for U.S. companies that made everything from shoes and furniture to makeup and clothes. But local manufacturers spent much of 2019 rethinking their strategy and steering away from investment in China as they tried to deal with the tariffs’ potential long-term impact.

Keep Reading: 2019 Year in Review Special Report

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