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The Port of New Orleans ranks No. 3 among U.S. ports for imported steel. A tariffs-related dip of 25 percent in imports at midyear from a year ago could mean a loss of as much as $1 million for the first half of the year.

The threat of a worsening trade war with China is looming large for Louisiana, especially for farmers who are also facing another wet planting season and high Mississippi River water levels, the same set of conditions that hit the soybean crop in the southern part of the state last year.

In the latest move in the U.S.-China trade face-off, President Donald Trump on Friday raised tariffs on $200 billion of Chinese goods, and the Chinese government threatened to retaliate.

Talks between U.S. and Chinese negotiators were set to continue through the weekend, but the dispute has escalated over the past year, hitting a wide range of agricultural and industrial products and roiling financial markets.

The two countries are sparring over U.S. allegations that Beijing not only creates barriers for U.S. exporters, but also steals technology and pressures companies to hand over trade secrets in exchange for access to Chinese consumers.

Trump has maintained support in some business quarters for his hard-line stance, though many business leaders, even in Trump-friendly Louisiana, worry that the trade fight is doing more harm than good.

"No good is going to come from the tariffs themselves," said Paul Aucoin, executive director of the Port of South Louisiana, which handles most of the bulk cargo exports out of the state, particularly grain.

"The president's plan is to use them to coerce China into making trade concessions, I understand that, but in the meantime it is the grain people who are going to suffer most from the tariffs."

The Mississippi River is the main artery for grain shipments out of the U.S., accounting for more than 60 percent of the country's grain exports. The Louisiana port system last year shipped about $21 billion in agricultural products to export markets, according to port data.

Kyle McCann, a spokesman for the Farm Bureau of Louisiana, said the first wave of tariffs last year hit at a time when unusually wet weather meant that planting was badly affected.

"All of Louisiana's soybeans go to the river, to export markets, and China is our No. 1 export market," he said. "When export markets are not moving, it really is a killer; it doubles the problems."

For some farmers in the south of the state, there wasn't even relief from the Trump Administration's $12 billion Market Facilitation Program, a subsidy offered to compensate for the tariffs. To qualify for the subsidy, the crop had to be harvested, but for many farmers the extraordinarily wet weather meant many crops were left in the field.

That "triple whammy" threatens those farmers again this year, McCann said.

It's not just agricultural products that are impacted. Even for products that are currently protected by the trade war — for example, domestically produced steel — there are knock-on effects.

Aucoin pointed out that even though local steel producers are benefiting from tariffs, which prevent cheap Chinese steel from competing, much of the port's $25 billion pipeline of infrastructure and industrial projects has been stalled because of the hike in steel prices and uncertainty about the trade war's outcome.

"A vibrant, healthy and competitive U.S. steel industry is essential to the goal of a strong U.S. economy," according to a statement Friday by the Port of New Orleans. "However, the wide imposition and enforcement of new tariffs on imported steel has the opposite effect, creating a negative impact on ports, the larger maritime community, manufacturers throughout the U.S. and other steel-consuming industries."

The New Orleans port said its volume of imported steel fell 25% last year due to tariffs, while it reported an overall decline in its bulk cargo of 23%.

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The latest tariff increase extends 25% duties to a total of $250 billion of Chinese imports, which includes $50 billion already taxed at 25% before the new hike.

Trump said last Sunday he might expand penalties to all Chinese goods shipped to the United States. Beijing retaliated for previous tariff hikes by raising duties on $110 billion of American imports, though because the U.S. exports much less to China than China does to the U.S., the Chinese are running out of U.S. goods to tariff.

Some U.S. businesses and farmers continue to support the Trump Administration's tough stance, even though they maybe suffering in the short term.

"They're trying to renegotiate some issues to make things more accountable," said Richard Fontenot, who farms 4,000 acres with his brother in Evangeline Parish, producing soybeans, rice and crawfish. He said that even though trade negotiations to open China's market to U.S. rice exporters have been going on since 2001, "we have yet to sell them a single grain of rice" because of non-tariff barriers, such as an insurmountable bureaucracy.

"We have a superior product, safe and affordable, and they’re fearful of our competitiveness," he said.

But escalating trade wars never work out, said Douglas Nelson, an economics professor at the Murphy Institute at Tulane University and a trade expert.

"Everybody gets hurt in a trade war, and it's not just tariffs," he said.

Even if China's exports are more vulnerable to tariffs than U.S. exports because of the huge trade imbalance, China "can disrupt value chains, make it harder for Americans to make competitive cars, aircraft, computers, phones," Nelson said. "There are other firms, not Americans, who can fill that gap, and once we lose that piece of the market it’s gone."

The trade talks were set to continue in Washington, D.C., over the weekend. One sticking point has been U.S. insistence on an enforcement mechanism with penalties to ensure Beijing lives up to its commitments.

American officials say China has repeatedly broken past promises. So while China wants tariffs lifted as soon as an agreement is reached, U.S. officials want to keep them as leverage to ensure compliance.

With Associated Press reports.


Follow Anthony McAuley on Twitter, @AnthonyMcAuley2.