A portion of losses will stem from front-loading activity where shippers imported larger volumes earlier this year in anticipation of tariffs. Inventories are now considered to be high, so a temporary drop-off is anticipated for the latter half of the year as those inventories are sold down.
The US government's broad-based tariffs will leave US ports the most vulnerable to trade losses. The extremely high tariffs on China are particularly significant for the Port of Los Angeles and the Port of Long Beach, which have the highest trade volume with China amongst US ports, Fitch Ratings says. Exposure to China nears 50% of the ports' imports, although exports to China make up less than a quarter of all exports according to a recent Fitch Ratings report..
While trade volume declines are hard to predict, some West Coast ports have indicated volume losses are likely to reach or exceed 10%. Some of this will be offset by shifts to trading partners other than China, although not all goods from China can be substituted or sourced elsewhere.
