NEW ORLEANS, LA (WVUE) - As the trade despite between the U.S., China and some other countries continues, Louisiana ports are watching anxiously.
"Our ports are busier now than they've ever been, we have more jobs in Louisiana associated with this activity than you can imagine, about a half a million jobs altogether, so we certainly don't want to lose any momentum that we have in our state," said Gov. John Bel Edwards to reporters Wednesday afternoon during a stop in New Orleans.
China has vowed to take "firm and forceful" measures as the U.S. threatens to expand tariffs.
Earlier, President Trump used a national security waiver to impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union.
"Louisiana potentially could suffer more than any other state in the nation because of how busy our ports are, much of which is due to the importation of steel and aluminum, but also the export of grain from around the United States," said the governor.
The Port of New Orleans is concerned.
The Port of New Orleans (Port NOLA), like other commercial enterprises, depends upon a strong U.S. economy and a competitive U.S. steel industry is essential to that goal. Imposing and enforcing tariffs arbitrarily on imported steel and aluminum would negatively impact ports, the larger maritime community, manufacturers throughout the U.S., and other steel-consuming industries.
Port NOLA is particularly sensitive to tariffs on imported steel and non-ferrous metals such as aluminum because the commodities are important revenue sources and generate significant transportation jobs. Port NOLA imported 2.48 million tons of steel in fiscal year 2017, which represents 83 percent of Port NOLA's breakbulk tonnage and 30 percent of the its total general cargo tonnage. Port NOLA also imported 665,154 tons of aluminum traded on the London Metals Exchange.
Additionally, the reaction of other countries and their desire to retaliate against U.S. exports is a concern for Port NOLA and ports along the Lower Mississippi River. Louisiana is a leader for exporting the nation's agricultural products to overseas markets, with a nearly 60 percent market share of export grain from the U.S. Midwest.
In 2002, former President Bush imposed steel tariffs on a variety of imported steel products from a limited list of foreign countries under a different provision of law, Section 201 of the Trade Act of 1974. In the ensuing year, Port NOLA suffered a 46 percent decline in steel imports. In addition, the U.S. economy lost 200,000 jobs, more than were employed by the entire steel industry (187,500) at the time. Restricting steel imports would cause wide-ranging economic damage, raising prices for U.S. industries such as construction, transportation, and mining. Section 232 of the Trade Expansion Act, the law on which the Trump Administration is relying, is far broader than the law used in 2002 and could result in far steeper tariffs on a wider variety of steel products from a longer list of foreign countries.
"Port NOLA believes free and open trade policies, combined with appropriate incentives for U.S. steel producers is the best means to promote all sectors of the U.S. economy. We will continue communicating to members of the Louisiana delegation that it is in the best interest of the Port and U.S. economy that the Administration limit actions related to this matter," reads a statement from Port President and CEO Brandy Christian.
The governor fears plans for new liquified natural gas plants in the state could be adversely affected.
"All of a sudden the project costs may go up so much that they reconsider that investment," said the governor.
On Capitol Hill, the Senate passed a non-binding resolution to give the Congress more say about tariffs that are imposed in the name of national security. The vote is seen as a response to the president's earlier use of a national security waiver to impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union.
On the U.S. House side, the tariffs do not sit well with House Speaker Paul Ryan.
"I don't want to hamstring the president's negotiating tactics, but I've long said I don't think tariffs are the right way to go," said Ryan, R-Wisconsin.
Ryan added that China does not play fairly.
"So, I think we are right to point that out. I just don't think tariffs are the right mechanism to do that," said Ryan.
"If this is an attempt by the president to get the United States in a better place with respect to managing trade imbalance in terms of imports and exports and so forth then we hope he's successful, but we hope he's successful in the short-term," said the governor," said the governor.