Message from the President

The uncertainty caused by a shifting U.S. tariff policy has created plenty of conversation among State Chamber members.

As I write this, container shipping traffic from China to the Port of Los Angeles — the busiest destination for ships coming from China to the U.S. — has dropped to a level three times lower than the worst weeks of shipping during the pandemic.

During a briefing in May, Port of Los Angeles Executive Director Gene Seroka said that he’s anticipating vessel volumes to come in well below what the port saw during the peak of pandemic, while predicting lower inventory for businesses “across a variety of retail sectors,” as well as for parts supplies for U.S. factories. “That’ll leave us with fewer selections of products and likely higher prices,” he said. “For now, uncertainty remains in every business meeting that I have, and trying to find a way to make the best decisions for companies possible still remains elusive.”

The Trump Administration believes China must address the trade deficit issue with the U.S. to achieve a lasting trade deal and tariff reductions. For China, the U.S. is the number one export destination of consumer goods they produce, and no other market comes close. Without U.S. exports, China will experience an economic slowdown, as their own economy, which is defined by an older demographic that is largely past its consumption years, cannot absorb whatever inventories remain.

The resulting product shortages here in the U.S. will likely lead to inflated prices and a slowing of economic activity. Whether it’s steel, aluminum, copper, thermostats, clothes, or other consumer goods, our members will be challenged.