Autumn Barongan grocery shops for her family using her recently replenished EBT on Friday, Nov. 1, 2024, at Fareway in Winterset.
Los Angeles, California – Southern California’s massive trade and logistics industry could face severe consequences from President Trump’s escalating tariff policies and expanding environmental regulations, according to a new report released Tuesday by the Los Angeles County Economic Development Corporation (LAEDC).
Commissioned by the Southern California Leadership Council (SCLC), the report details how proposed tariffs on Chinese goods — and expected retaliatory tariffs — could jeopardize a region that is home to the busiest container port complex in the United States and the ninth-largest in the world.
In 2022, the San Pedro Bay ports of Los Angeles and Long Beach handled 19 million container units, representing 35% of U.S. waterborne containerized trade and valued at over $469 billion. That same year, the trade and logistics sector contributed nearly $300 billion in direct economic output, supported almost 2 million jobs, and generated $93.3 billion in tax revenue.
“This is like having a winning sports team and deciding to trade all your players,” said former California Governor Gray Davis, co-chair of the SCLC, at a press conference Tuesday. Davis warned that undermining trade with China — the region’s largest trading partner — could cripple the state’s economy.
The report highlights the potential fallout from the proposed 145% U.S. tariff on Chinese imports and a retaliatory 125% Chinese tariff on U.S. goods. This would significantly reduce trade volumes through Southern California, with the Port of Los Angeles already anticipating a 10% cargo volume drop starting in May.
The repercussions could ripple through every layer of the supply chain — from port workers and haulers to wholesalers and retailers — and drive up prices for Southern California consumers. The report also notes the risk of foreign investment drying up, which could impact the nearly 67,000 local jobs supported by foreign-owned companies.
While Davis said he supports the idea of boosting U.S. manufacturing, he criticized Trump’s approach as overly aggressive. Instead, he advocated for incentive-based strategies similar to the 2022 CHIPS Act, which boosted semiconductor production through subsidies and tax breaks.
LAEDC CEO Stephen Cheung pointed to the 2018 trade war for context, noting how Chinese tariffs on U.S. wine led to a 25% drop in exports. “If you use the same logic model,” Cheung said, “you can see how it’s going to hit us pretty significantly.”
