Effects of U.S.-China Trade War: ‘The Proof’s In The Ports’
U.S. trade with the world is up a sliver this year, 0.47%, down from a slice just a couple months ago.
According to the latest U.S. Census Bureau data, five of the nation’s top 10 ports — five are seaports (with as asterisk), three airports and two border crossings — are showing trade increases, five are showing decreases.
As you will see, the impact of the U.S.-China trade war is far-reaching. Airport and seaport revenue is driven by fees associated with the planes that land and ships that dock. Those fees make our nation’s airports and seaports revenue neutral, as far as I know — meaning they require no taxpayer support. At our nation’s border crossings, revenues derived from bridge usage make them revenue positive, meaning they actually reduce the burden on taxpayers and pay for services.
Among our leading ports, the biggest increase is at the 10th-ranked Port of Savannah, up 8.74%, while the biggest decrease is at No. 5-ranked JFK International Airport, down 5.9%.
Both set records for trade in 2018.
Here’s a recap of where the nation’s top 10 ports stand, as we turn the corner into the second half of the year.
1. The Port of Los Angeles, long ranked as the nation’s top-ranked port among more than 450 airports, seaports and border crossings, is down 3.15% through May, the latest data available. The port is getting hurt by the U.S.-China trade war. China is accounting for 45% of the value of the port’s trade this year — and that’s down from 51% in 2018. Exports leaving the Port of Los Angeles bound for China are down 16.28% while imports from China into the California port are down 10.68%. The Port of Los Angeles is accounting for 6.7% of all U.S. trade this year, down from 7.1% for all of 2018.
2. Port Laredo, which briefly topped the Port of Los Angeles in trade this year, is back at No. 2. While China is accounting for 45% of the Port of Los Angeles’ trade this year and accounted for 51% last year, Mexico is accounting for 90% of Port Laredo trade this year, up from 97% for all of 2018. As goes Mexico, so goes Port Laredo, which sees most of its trade cross the World Trade Bridge. Port Laredo and U.S.-Mexico trade are heavily reliant on the automotive industry. Through May, Laredo trade is up 0.14% and it is accounting for 5.6% of U.S. trade with the world.
3. Chicago’s O’Hare International Airport is ranking third at this point in the year, accounting for 4.9% of all U.S. trade. Its trade is up 1.66%. O’Hare’s trade is heavily reliant on China, though not to the extent of the Port of Los Angeles. Through May, its trade with China accounted for 29% of its trade but was down only 4.25%. Its China trade was not getting whacked nearly as badly as Los Angeles’ because its imports from there — cell phones and related equipment and computers are 28% of the value of all imports, and largely coming from China — are not ensnared in the trade war.
4. The Port of Newark is ranked fourth through May, its trade up 2.22%, a relatively robust percentage this year, as increases in trade across the country continue to shrink with each passing month. The Newark port is accounting for 4.6% of all U.S. trade. Like Los Angeles and O’Hare, China is the top-ranked trade partner for the Port of Newark, accounting for 16% of its trade this year.
5. JFK International Airport is ranked fifth this year, also accounting for 4.6% of U.S. trade. As mentioned, its trade is down 5.9% this year, a greater percentage decline than any other top 10 port. Last year, China ranked as its top trade partner, accounting for 9.7% of its trade. This year, Switzerland is ranking No. 1, with China’s percentage down to 8.9%. Switzerland is at 9.2%
6. The Port of Houston, which finished 2018 with the fastest growth rate among the nation’s top 20 ports — up 21.22% — and has been one of the nation’s fastest-growing ports the last three years, thanks to rapidly increasing oil exports, is seeing its rate of growth slow this year. Why? China was a large purchaser of oil from the Port of Houston. In 2018, China accounted for 9.3% of the port’s trade, second only to Mexico, at 8.9%. In 2019, that percentage has slipped to 7.5%. For the month of May, that percentage has slipped to 6.7% and it trailed Brazil as well as Mexico. China accounted for 10% of all Houston oil imports in 2018. In 2019, that percentage is down to 3.8%. For the month of May, it was down to 2.4%.
7. Trade over Detroit’s Ambassador Bridge is down 5.56% through May, second only to JFK in the severity of the decline. Like Port Laredo, its trade is heavily dependent upon one trade partner, in this case Canada. Through May, it is accounting for 90% of the value of its trade. Four of the top five Detroit exports are related to the automotive industry and three of those four are down more than 10% this year — motor vehicle parts, motor vehicles and motor vehicle engines. On the import side, three of the top five are related to the automotive industry and all three are down: motor vehicles, motor vehicle parts and motor vehicle engines. The value of motor vehicles, valued at twice as much as the second-ranked export, are down almost 21% this year.
8. The Port of New Orleans is showing a decline of 3.81 percent in its trade this year. Canada is the port’s top trade partner. Exports to Canada are more important than imports from Canada, and aircraft and parts are the leading export to Canada, accounting for 19% of that trade. Here also, however, China is a factor. This year, China is accounting for 5.7% of all New Orleans trade; last year, that percentage was 7.7 percent. The Port of New Orleans, in Census data, includes trade with Louis Armstrong International Airport, which explains the asterisk at the top of his post.
9. Los Angeles International Airport is the ninth-ranked port and the third-ranked airport among the top 10. It is accounting for 2.8% of all U.S. trade this year, its trade off 3.53%. As is the case with the its neighbor, the Port of Los Angeles, it is both heavily reliant on its trade with China. Unlike the seaport, however, it’s trade with China is down but 0.99%. In that sense, its trade more closely mirrors that other airport that is reliant on its China trade, O’Hare. Through May, China was accounting for 25% of all LAX trade with the world.
10. The Port of Savannah has jumped into the top 10, skipping ahead of the Port of Long Beach, hammered by the U.S.-China trade war, and Port Huron in Michigan, where trade is also down this year. As mentioned previously, it is the nation’s fastest-growing top 10 seaport, coming on the heels of a record-breaking 2018 when its trade surpassed $100 billion for the first time. Its trade with China, its top trade partner, has fallen the slightest of slight amounts, down 0.03% this year. China is accounting for 24% of Savannah trade thus far in 2019. Trade with Japan, South Korea and India are all up sharply, more than 25% in the case of the first two, and 13.27% in the case of India.