LARRY KANTER Staff Reporter
The U.S. dollar’s surge against the world’s major currencies is making waves for Southern California’s international trade community.
As a result of the dollar’s precipitous rise in recent months, the volume of exports moving through the area has taken a steep drop.
Conversely, the volume of goods imported from overseas is growing as a result of the dollar’s increased buying power abroad.
At the Port of Long Beach, for example, exports in the fourth quarter of 1996 were up a scant 0.4 percent over the like period a year earlier, while imports surged 17.4 percent, said port spokeswoman Yvonne Avila.
Overall in 1996, exports posted a 4.4 percent increase over the previous year, while imports jumped 14.4 percent.
That’s almost a complete reversal from 1995, when exports moving through the Port of Long Beach increased some 25 percent and imports rose only 6.4 percent.
Local freight forwarders are reporting a similar trend.
“Imports are way up,” said W. Guy Fox, chairman and senior vice president of Global Transportation Services Inc. in Redondo Beach, which handles both imports and exports. “We’ve seen a big influx (of imports) in the month of January. The volumes are changing.”
For months, the U.S. dollar has been steadily climbing in value against virtually all of the world’s major currencies, but the effect has been most acute in relation to the Japanese yen.
Since its last low in April 1995, the greenback has risen 54 percent against the yen. Last week, it was trading at a rate of about one U.S. dollar for 124 Japanese yen.
The dollar also has been gaining value against most major European currencies and the Mexican peso largely as a result of a two-year Clinton administration effort to bolster the dollar’s strength.
Speaking at an economic conference in Berlin last week, Clinton administration officials indicated that the dollar was strong enough and that the U.S. would back off its strengthening policy a move that elicited a sigh of relief among the finance ministers and central bankers of the world’s largest capitalist countries.
It also came as a relief to some L.A.-area businesspeople, such as Leon Schwartz, president of Los Angeles-based Forrester Industries Inc., an importer and exporter of lighting fixtures.
As a result of a backlog of orders that could take as long as two years to fill, Schwartz who sells lighting systems to hotels, offices and convention centers in Japan, Taiwan and other Asian nations said he has not yet felt a slackening of demand among his Asian customers as a result of the weak yen.
But he knows it’s coming.
“I’m going to be injured,” Schwartz said. “I just don’t know how bad.”
Small-volume exporters such as Schwartz are likely to suffer the most as a result of the dollar’s surge, which has led to a steady rise in the cost of U.S. goods overseas.
But the strong dollar is not sparking the same degree of widespread concern it did during its last surge about a dozen years ago.
In the intervening years, many American companies have better insulated themselves from the effects of currency fluctuations by cutting costs and expanding production overseas.
Indeed, as the L.A. and U.S. economies grow increasingly global and intertwined with those of foreign lands, fluctuations in currency values are becoming less and less of a factor for manufacturers.
“It’s not really affecting us,” said Margaret Bernhardt, international administrator at K-Swiss Inc., a footwear and apparel company based in Chatsworth.
With manufacturing plants scattered throughout Asia, K-Swiss is able to export goods even to the severely weakened Japanese economy without being hurt by dollar-yen fluctuations, Bernhardt said.
In fact, the strong dollar actually is helping companies with a significant offshore presence.
“If your company is directly investing in Mexico, you’re doing pretty good because your dollar is buying more,” said Carlos Valderrama, director of Latin American operations for Carlsmith Ball Wichman Case & Ichiki, a downtown L.A. law firm.
Local companies with operations in Mexico can also benefit from the dollar’s strength by producing products in Mexico for export either back to the United States or to other countries, Valderrama said.
On the other hand, he added, “if you are exporting finished products (from the United States), it’s just too expensive.”