While U.S. ports handle record-setting volume, retailers fear higher tariffs on foreign-made goods proposed by former President Donald Trump could blunt soaring consumer spending.
The Republican presidential nominee has made tariffs a central issue during his campaign, saying he would use them as an economic weapon to protect U.S. industry from lesser-priced goods chiefly made in China.
At the same time, Trump claims that the U.S. would bank billions of dollars in revenue from exporting countries paying those tariffs — a fundamental misunderstanding of how they work, say analysts and importers.
“Tariffs are paid by the importer and not the producing country, and that is passed on to the consumer. It’s a tax paid by the consumer,” said Matt Shay, chief executive of the Washington-based National Retail Federation, the largest U.S. retail trade group. “Tariffs can be a useful temporary tool during trade negotiations, when used strategically and sparingly, to get benefits in a trade relationship.”
Shay quoted estimates by the Peterson Institute for International Economics and others that found existing import tariffs cost an estimated $1,500-$3,000 per household, but that that number would rise to an average of more than $4,000 under a second Trump administration.
Shay’s comments came during a video call Friday with Port of Los Angeles Executive Director Gene Seroka, who announced record third-quarter imports worth $955 billion moving through the busiest U.S. container gateway.
As retailers formulate their business plans for 2025, Shay said tariffs and other business-centric policy questions will have to wait for the election.
“Preserving pro-growth tax policy is a priority for us,” said Shay. “The 2017 tax act reduced corporate taxes from 35% to 21%. That is still higher but more in line with other OECD [Organisation for Economic Co-operation and Development] countries we trade with. It made the U.S. a much more competitive operating environment. Retailers had the opportunity to reinvest in their businesses instead of sending that money away as a tax. For many businesses, that was especially important for survival during the COVID pandemic. So that’s a big priority for us.”
The NRF earlier this month forecast end-of-year holiday retail sales 2.5%-3.5% higher than in 2023, equivalent to a record $979.5 billion-$989 billion in total spending in November and December and up from $955.6 billion a year ago.
Retailers expect no impact, Shay said, from the strike by members of the International Longshoremen’s Association union that briefly shut down container handling at East Coast ports in early October.
Importers had spent the summer frontloading shipments or rerouting cargo to the West Coast, to avoid potential delays from a strike, militia attacks on shipping in the Red Sea and congestion at Asian ports. As a result, most holiday retail merchandise is already at U.S. destinations, according to Shay.
“The strike cost as much as $5 billion a day [in delays], according to some estimates,” Shay said. “We expect imports at Los Angeles and ports around the world to be at elevated levels, but it will have no effect on holiday business.”
Shay credited acting Labor Secretary Julie Tsu and Lael Brainard, director of the National Economic Council, for their roles in helping to reopen the ports. The ILA and port employers represented by the United States Maritime Alliance (USMX) agreed to a 62% pay raise over the six years of a new master contract, and to extend the current pact through Jan. 15, 2025, while they return to negotiations on automation and other issues.
“We want to see USMX and the ILA reach a fair deal in place so we don’t have another interruption in service,” said Shay. “Automation is going to take additional time.”
Find more articles by Stuart Chirls here.
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Richard Davis
James Bauman dba Kirplopus MC 895097
Where did you get that crap from, Fox News? To say Trump’s tariffs raised wages by $8 an hour is just ridiculous and a lie. Did you go to Trump University? Right, economists are stupid and Trump is a genius. It’s no wonder Trump filed for bankruptcy 6-7 times. Trump and the Republicans don’t even want the minimum wage to be $8 an hour. If what you said were true, why are people complaining about high prices now? They got an $8 an hour raise to counter those high prices.
ChrisL
Trump uses tariffs as a negotiation tool. The inability to read Trump’s use of hyperbole or compare statements to execution for a better understanding is remarkable and among the early symptoms of Trump Derangement Syndrome.
Jeff Clark
Trump effectivity implemented China 301 tariffs, at 25% for thousands of HTS numbers, eventually many of these numbers were reduced to 7.5% and many free. What is interesting in watching the current presidential campaign Biden-Harris have been driving the point of Trump tariffs while at the same time maintaining those tariffs. Biden-Harris maintained the tariffs when they took office and in June 2024 eliminated the majority of exceptions, adding another $18B of products to the list of China 301 taxes.
James Bauman dba Kirplopus MC 895097
Should be called “National Traitor Federation.” The price of goods should not be #1 when deciding trade policy; rather; the health of our country & workforce. When less educated; sometimes due to less privileged, young adults can’t earn decent money legally; drug sales becomes a thing. What cost do we assign to this terrible reality? There IS a cost. Remember when Stoughton trailer asked Trump admin to do anti dumping investigation? They found that China WAS dumping trailers into the US; where Stoughton could not even buy the steel for the price that CMC was selling finished trailers. So, go away, National Traitors Assciation, with your greedy, self serving, anti American propaganda. Assuming consumers do pay an additional $2000 / year due to tariffs? The blue collar wages go up way more than that. Trump’s tariffs raised wages from $12/hr to $20/hr, FAST. That’s $8 higher due to demand for labor X40 hrs wk X 52 weeks = $16,640 per year MORE income via tariffs. Who wouldn’t want to pay $2000 more for goods and yet make $16,640 more per year in salary? I’ll take this deal. This is why people on bottom of income ladder like Trump; to the dismay of stupid economists. People on top; college educated; are not helped by tariffs; but blue collar workers are; and this blue collar group = far more voters vs white collar.