Port Nola's giant cranes in operation

Port of New Orleans has seen its container business boom over the past decade, rising 40% to a record of more than 591,000 twenty-foot-equivalent units (TEUs) last year. The giant, 100-foot-high gantry cranes acquired from South Korea in 2011 have been integral to that growth. Similar cranes ordered from China could fall under tariffs proposed on Chinese imports.

During the recent Democratic Presidential debates, the unanimity of opinion on China was almost shocking. Colorado Senator Michael Bennet stated: “…I think the president has been right to push back on China” and the U.S should mobilize the rest of the world in pushing back on its mercantilist trade policies. And South Bend, Indiana, Mayor Pete Buttigieg agreed that the China challenge is a serious one, adding that “they’re using technology for the perfection of dictatorship”.

Some Democrats are even more hawkish on China than Trump, criticizing him for agreeing to loosen restrictions on trade with the Chinese telecommunications giant Huawei.

For Louisianans, this alignment between Democrats and Republicans on China means that we are going to continue to ride out the escalating trade war. Tough because the state’s economy is tied to international commerce.

In fact, according to the Office of the United States Trade Representative, Louisiana was the fifth largest state exporter of goods in 2018, and nearly $19 billion dollars of those exports were to China.

Regrettably, hoping for China to give in to President Trump’s demands currently is unlikely. In China, the ruling Communist Party will accept a certain level of economic pain. Like our Commander in Chief, President Xi cannot risk capitulating to the Americans and being perceived as weak.

In a recent interview, Doctor Bill Cassidy, Louisiana’s senior U.S. Senator, insisted the tariffs were necessary because the Chinese will “break any rule” and he “fully stands” behind the President.

Finally, the recent “truce” between China and the U.S., was only an agreement to halt further tariff escalation while talks continue. Ultimately, should economic conditions change dramatically in either the U.S. or China, perhaps there could be a resolution. Barring that, Louisianans should expect the trade war with China to continue.

Jerry Hingle

International Trade Associates

New Orleans

Gary Meltz

Meltz Communications

New Orleans