What Trump's Trade War With China Means For LA's Economy

Port of Los Angeles in 2016. (Photo by Maya Sugarman for KPCC)

President Trump slapped new tariffs on $16 billion worth of Chinese goods on Thursday.

Here's a look at how that may impact Southern California's economy:

WHAT AN ESCALATING TRADE WAR COULD MEAN FOR L.A.'S PORTS

L.A. is home to North America's busiest port, and China is, by far, its top trading partner.

The Port of Los Angeles handled $145 billion worth of cargo last year from China and Hong Kong alone. To put that in perspective, all of the cargo handled by the port in 2017 was valued at $284 billion.

With tariffs hanging over, business has actually been booming. The Port of Los Angeles just had a record July, perhaps due to goods being rushed in ahead of tariffs going into effect.

But now, Port of L.A. spokesman Phillip Sanfield worries about a slowdown at a time when retailers are typically gearing up for the holiday shopping season.

"If all this cargo is here now, things may begin to tail off in the months ahead," he said.

Sanfield estimates that as much as 23% of cargo coming into the Port of L.A. could be subject to tariffs as trade conflicts escalate.

People ride shared electric scooters in Santa Monica in July. (Photo by Robyn Beck/AFP/Getty Images)

TARIFFS COULD PUMP THE BRAKES ON ELECTRIC SCOOTERS

The new tariffs add 25% to the cost of everything from Chinese chemical products to auto parts.

Also on the list: those electric scooters that have been multiplying rapidly across L.A. streets.

Popularized by startups like Venice-based Bird, the dockless vehicles fall under the product category "Motorcycles (incl. mopeds) and cycles, w/electric motor for propulsion."

Bird's director of public policy Matthew Kopko traveled to Washington D.C. last month to weigh in on the proposed tariffs. He said a "significant disruption" to Bird's business model at this time could directly harm their users.

"Putting a sizable tariff on scooters will do little to impact the Chinese economy but risks the stratospheric growth of an American success story," Kopko said.

Terry Sherry, co-founder of Orange County-based electric bike company Pedego, said his business is in a tough spot.

"It's not like we can buy our products from a U.S. manufacturer," Sherry said. "There are no US manufacturers of electric bikes."

Pedego plans to raise its prices by about 8%. Sherry said the company will absorb some of the new costs, but the money spent on tariffs won't be going toward hiring or investments. He said there are already plans to move production from China to Vietnam.


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