Ken Roberts – Contributor
The Port of Los Angeles is no longer the nation’s leading port, further evidence that the U.S.-China trade war is scrambling the deck chairs of U.S. trade.
Laredo, a city of 260,000 hard on the U.S.-Mexico border, is.
In the month of March, the latest U.S. Census Bureau data available, Port Laredo’s trade was $20.09 billion while trade through the Los Angeles port’s was $19.66 billion. Laredo’s trade was up 9.52% from February while the Port of Los Angeles’ trade was down 10.01%.
Although it is just one month of trade, and although the Port of Los Angeles remains the nation’s top-ranked port year-to-date among the more than 450 airports, seaports and border crossings, it is just one more sign that President Trump’s efforts to force change in China’s policies is having an impact.
In previous columns, I have written how China went from buying 57% of all U.S. soybeans to dropping 94.75% in one month. I have written about how China went from being the second-leading buyer of U.S. oil to buying none. I have written about how U.S. trade with China fell faster earlier this year than at any time in at least 17 years. I have written that China now accounts for a lower percentage of U.S. imports than at any time since 2012. And I have written that Mexico is now the United States’ leading trade partner, having replace China.
And now this.
At work, in part, is how important Mexico trade is to Laredo and how important China trade is to Los Angeles. Laredo, in particular.
No other port has handled more trade with one country than Laredo does with Mexico, more than $228 billion in 2018. That”s because last year and this year, Mexico has accounted for more than 97% of all Port Laredo trade.
At the Port of Los Angeles, trade with China accounted for 51% of the port’s trade in 2018. That’s down to 45% through the first quarter of this year and 36% for the month of March.
The two “ports” serve different roles, of course, in the U.S. economy. The Port of Los Angeles is critical for U.S. imports of a wide variety of high-tech goods and apparel, most but not exclusively from China. Port Laredo is a key player in the automotive industry as well as the perishable industry, largely on the import side but not exclusively, and almost exclusively with Mexico.
Through March, Laredo’s trade with Mexico is up 1.57%, with exports down slightly and imports up. At the Port of Los Angeles, trade with China is down 17.77% this year. Exports are down slightly more than 20% and imports down slightly more than 10%.
Will it last? Will Port Laredo remain the nation’s leading port?
That’s anyone’s guess, of course. The key factor will be whether there is resolution to the U.S.-China trade war. I’ll leave that prediction to others.