Northwest Ports Urge Caution on Auto Tariffs

Port of Seattle (file image)

By The Maritime Executive 2018-06-21 12:03:16

In a joint statement issued Monday, the Northwest Seaport Alliance and the ports of Seattle, Portland and Vancouver (Washington) called on the Department of Commerce to move cautiously on President Donald Trump's request for tariffs on imported autos and auto parts. Addressing Commerce Secretary Wilbur Ross, the ports wrote to "urge your consideration of how such actions might negatively impact our regional and national economy, workers and consumers."

The ports noted that automobiles and automotive parts are a substantial part of their trade volume. In 2017, the NWSA handled nearly 150,000 imported cars, and the value of the combined auto and auto parts imports through the NWSA exceeded $7 billion. The Port of Portland handled a total of 314,000 autos in 2017, both imports and exports, and the Port of Vancouver imported over $1.7 billion in vehicles and parts. 

The ports warned that unilateral trade actions by the United States often result in retaliatory tariffs from the affected trading partners, as seen with the administration's new steel and aluminum tariffs and the newly-imposed tariffs on Chinese goods. Auto exports are an important part of the ports' business: Portland leads the West Coast in this trade category, and it sent 87,000 Ford vehicles to Asian markets last year. 

According to analysts with the Peterson Institute for International Economics, the tariffs would affect over $200 billion in car imports, a value equal to that covered by all tariffs the administration has recently imposed on solar panels, steel and aluminum, and Chinese industrial / tech products. Nearly 98 percent of the tariffs on car and truck imports (by value) would target the European Union, Canada, Japan, Mexico, and South Korea, all U.S. allies. The institute forecast that the U.S. auto sector would shed 200,000 jobs due to the tariffs, rising to 625,000 jobs in the event of retaliatory trade measures against U.S. goods. 

The car tariffs are not the first round announced this year, and the NWSA has warned previously about the impact that the administration's trade measures would have on Northwest ports. John Wolfe, CEO of The Northwest Seaport Alliance, told the House Ways and Means Committee that "tariffs should be a measure of last resort that are narrowly targeted to address the problem and minimize the unintended impacts on Americans." In particular, he pointed out that the business of the Puget Sound seaports is "inextricably linked to China," with $27 billion in Chinese imports and $5 billion in China-bound exports passing through their terminals. The administration's largest tariff proposals have targeted Chinese goods.