With former President Donald Trump proposing new 10% tariffs on all imported goods, shippers and ports alike are working to figure out what that might mean for them in the event of a second Trump presidency.
"The former president is putting out a lot of proposals that would fundamentally alter the approach to trade," said Footwear Distributors and Retailers of America President and CEO Matt Priest during a July 17 briefing with the Port of Los Angeles.
Trump first floated the idea in May, as a means to offset the extension of tax cuts he implemented in 2017, during his first term. The proposal would include a 60% tax on all goods from China, which accounted for roughly 15% of all U.S. imports in 2023, by value. As for how that would affect the U.S. supply chain, Port of Los Angeles executive director Gene Seroka said that there's still "a long way from here to there, wherever 'there' may be."
"If it does come to fruition, that could change the landscape and future of the Port of Los Angeles," he said, adding that trade through the port from Southeast Asia and Mexico has "picked up traction" in recent months, while the ports' share of imports from China has gradually dipped. "As these trade winds shift, we'll be out in front," Seroka said.
In the event of a Trump victory in November, the changes being proposed would also likely require a lengthy legislative process, Priest said, affording plenty of time to assess the relative impacts. Others have expressed alarm over the potential fallout. That includes the Peterson Institute for International Economics (PIIE) – a nonpartisan think tank based out of Washington, D.C. — which warned in May that Trump's blanket tariffs "would risk a global trade war."
"The indiscriminate imposition of tariffs would no longer be confined to a trade war with China, if that is where the United States is headed, but a war against trade itself," PIIIE fellow Alan Wm. Wolff said.
Those higher prices at the border are often passed on to the consumer, Priest said, as businesses are forced to charge more for products to cover the added cost of imports. In the meantime, he said that the conversation for shippers right now revolves around finding ways to bring in products before any new tariffs take effect, and on a larger scale, gradually moving manufacturing out of China to countries in Southeast Asia such as Indonesia and Vietnam.
Source: https://www.supplychainbrain.com/articles/40047-new-proposed-trump-tariffs-could-fundamentally-alter-us-supply-chains
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