Head of the Port of LA Sees a Brewing Trade Storm
A conversation with Gene Seroka, the executive director of the Port of Los Angeles, where tariffs are crimping imports.
Gene Seroka is on the front line of the trade war.
Photographer: Allison Zaucha/Bloomberg
The Port of Los Angeles is the busiest seaport for container freight that supplies retailers and manufacturers, making it ground zero for the disruption of trade caused by President Donald Trump’s tariffs. Gene Seroka, the executive director of the port, is in the perfect position to see the effect of those tariffs on the port and its customers. Here is an edited transcript of our interview:
Thomas Black: The first quarter was strong for the port. It’s clear that there was pull-forward going on. Is this front-loading still occurring in April, and where do you see it going from here?
Gene Seroka: We saw the last surge of this front-loading in the month of March. And afterwards, on April 2, we saw those sweeping tariffs announced in Washington, and folks started to take a second look at their imports. Then, we saw the ratcheting up of the China tariffs. We now sit at 145% and retaliatory tariffs at 125%. So, in effect, import-export with China is very limited right now.
TB: There’s a lot of talk about orders being canceled. How big of a drop-off are we going to see?
GS: It’s going to be a huge drop-off. In fact, arrivals next week at the Port of Los Angeles will be down 35-plus percent year over year. Major retailers, home-improvement stores, and even manufacturers who source parts from China are saying that imports from that country have all but stopped because the price of products made in China now is two and a half times what it was last month. And they just can’t justify that.
There are about 125,000 companies that import through the Port of Los Angeles annually. And no one company has more than a 5% share of our port’s business. So we’ve got a lot of small to medium-size importers — retailers in particular — that are really caught in the crosshairs. They may not have had the ability to bring in excess inventory — whether it be financial, finding warehousing space, elevated interest rates or inventory carrying costs.