This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
There is no bigger issue for container ports in the United States than how tariffs will impact our industry. Restrictions on goods coming into our country do more than just reduce our bottom lines; they negatively impact jobs and economic growth.
This current trade war is different than ones from previous generations because it involves the two largest economies in the world. The largest trade war of the last century resulted from the US Smoot–Hawley Tariff Act of 1930, which imposed import tariffs on more than 20,000 goods. America’s trading partners during that time responded with boycotts and increased tariffs on US exports.
The future of this current trade confrontation is unclear since it’s still ongoing and there are continuing threats made between both sides. In the meantime, a lot of manufacturing has shifted from China to Southeast Asian nations. As we continue forward, ports that are more diversified and handle different types of cargos will be able to adjust easier to tariff impacts.
Uncertain around long-term tariff impacts is causing economic growth around the world to slow to a crawl. The International Monetary Fund has forecast global growth will come in at just 3 percent this year, the slowest expansion since the recession of 2009. Increased policy uncertainties combined with the tariffs are impacting business confidence.
However, at least so far, that has not translated into job losses, reduced consumer spending, or loss in personal income. Nevertheless, it is something to monitor. We should continue to educate our local, state, and federal elected officials on the important role ports play as economic engines in their jurisdictions. Policymakers can be our friends and help avoid any further unnecessary hits that impact all of us.