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How Trump’s Trade War Has Whipsawed the Port of L.A.

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Normally, the towering green crane in the Everport Terminal at the Port of Los Angeles would be busy unloading hulking container ships. Longshoremen below would flit around in “bomb carts” used to ferry containers from the ship. Big rigs would carry off imported furniture, car parts and clothing to other parts of the country.But on a recent Thursday morning, the 300-foot crane sat idle, a casualty of the tariffs that President Trump has imposed to curb foreign trade. Almost a fifth of the 99 boats that Gene Seroka, the port’s chief executive, had expected to arrive in May were canceled.“It’s a very quiet day,” Mr. Seroka said. “This is the impact that the tariffs have had.”Listen to our reporter’s commentaryAna Swanson visited the Port of Los Angeles last month and found it to be unusually quiet. The job posting board showed 40 percent fewer positions than normal. And the port was running at 70 percent of normal capacity, according to its chief executive.The Port of Los Angeles, along with a nearby facility in Long Beach, makes up a shipping complex that stretches across nearly 75 miles of Southern California shoreline. The ports are a bellwether for trade and the U.S. economy. Together, they move an astonishing 40 percent of the goods that come into the United States via containers. They also account for 30 percent of what the country exports.As Mr. Trump’s chaotic and aggressive tariff strategy has seesawed this year, activity here has, too. That has threatened the livelihood of the roughly 100,000 workers at the port complex and complicated life for the hundreds of thousands of companies that bring goods through the port each year. The trends at the port hint at the pain that will ripple through the broader economy in the coming months, as fewer and higher-priced goods travel from ports and warehouses to American stores and consumers.The ports experienced a surge of activity this year when shippers rushed to bring in goods ahead of tariffs that reached their highest levels in a century. That rush has faded, and trade has become more sluggish. With higher tariffs set to snap back within weeks, both importers and port workers remain cautious, unsure of what their futures will hold.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    A Tidal Wave of Change Is Headed for the U.S. Economy

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    When the Covid pandemic hit, factories in China shut down and global shipping traffic slowed. Within a matter of a few weeks, products began disappearing from U.S. store shelves and American firms that depend on foreign materials were going out of business.A similar trend is beginning to play out, but this time the catalyst is President Trump’s decision to raise tariffs on Chinese imports to a minimum of 145 percent, an amount so steep that much of the trade between the United States and China has ground to a halt. Fewer massive container ships have been plying the ocean between Chinese and American ports, and in the coming weeks, far fewer Chinese goods will arrive on American shores.While high tariffs on Chinese products have been in place since early April, the availability of Chinese products and the price that consumers pay for them has not changed that much. But some companies are now starting to raise their prices. And experts say that the effects will become more and more obvious in the coming weeks, as a tidal wave of change stemming from canceled orders in Chinese factories works its way around the world to the United States.The number of massive container ships carrying metal boxes of toys, furniture and other products departing China for the United States has plummeted by about a third this month.The reason consumers haven’t felt many of the effects yet is because it takes 20 to 40 days for a container ship to travel across the Pacific Ocean. It then takes another one to 10 days for Chinese goods to make their way by train or truck to various cities around the country, economists at Apollo Global Management wrote in a recent report. That means that the higher tariffs on China that went into effect at the beginning of April are just starting to result in a drop in the number of ships arriving at American ports, a trend that should intensify.By late May or early June, consumers could start to see some empty shelves, and layoffs could occur for retailers and logistics industries. The major effects on the U.S. economy of shutting down trade with China will start to become apparent in the summer of 2025, when the United States might slip into a recession, said Torsten Slok, an economist at Apollo.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Kalamazoo (Yes, Kalamazoo) Reveals About the Nation’s Housing Crisis

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    A decade ago, the city — and all of Michigan — had too many houses. Now it has a shortage. The shift there explains today’s costly housing market in the rest of the country.For years, when Michigan politicians talked about the state’s housing problem, they were referring to a surplus: too many run-down houses, stripped of valuable copper, sitting empty and blighting neighborhoods. Now the message has flipped. In her State of the State address this year, Gov. Gretchen Whitmer lamented the housing shortage and landed one of her biggest applause lines with, “The rent is too damn high, and we don’t have enough damn housing. So our response is simple: ‘Build, baby, build!”If you want to know what the housing crisis for middle-income Americans looks like in 2024, spend some time in Michigan. The surplus-to-shortage whipsaw here is a mitten-shaped miniature of what the entire country has gone through.I’ve been writing about housing and the economy for two decades, and have watched as the nation’s housing market has made the journey from boom to bust to deficit, seemingly without pausing for a normal middle. There are lots of reasons this happened, but they center on a big one: the late-2000s housing bust, which the country has never fully recovered from. Or as Ali Wolf, chief economist at Zonda, a data and consulting firm, put it: “The Great Recession broke the U.S. housing market.”At first, rapidly rising housing costs seemed like a regional problem. It made sense that places like San Francisco, which was already expensive, filled with well-paid tech workers and hamstrung by stringent building regulations, would be in crisis. Much of the rest of the country was still affordable, however, so high-cost “superstar cities” were seen as an exception instead of a warning.Now California’s problem is everywhere. Double-income couples with good jobs are priced out of homeownership in Spokane, Wash. Homeless encampments sprawl in Phoenix. The rent is too damn high in Kalamazoo.The housing crisis has moved from blue states to red states, and large metro areas to rural towns. In a time of extreme polarization, the too-high cost of housing and its attendant social problems are among the few things Americans truly share. That and a growing rage about the country’s inability to fix it.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Car Deals Vanished During the Pandemic. They’re Coming Back.

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    Automakers and dealers are starting to offer discounts, low-interest loans and other incentives to lure buyers as the supply of cars grows.For much of the last four years, automakers and their dealers had so few cars to sell — and demand was so strong — that they could command high prices. Those days are over, and hefty discounts are starting a comeback.During the coronavirus pandemic, auto production was slowed first by factory closings and then by a global shortage of computer chips and other parts that lasted for years.With few vehicles in showrooms, automakers and dealers were able to scrap most sales incentives, leaving consumers to pay full price. Some dealers added thousands of dollars to the manufacturer’s suggested retail price, and people started buying and flipping in-demand cars for a profit.But with chip supplies back to healthy levels, auto production has rebounded and dealer inventories are growing. At the same time, higher interest rates have dampened demand for vehicles. As a result, many automakers are scrambling to keep sales rolling.Wes Lutz, owner of Extreme Dodge in Jackson, Mich., said he had several Dodge Challengers and Chargers that were eligible for $11,000 discounts from Stellantis, the manufacturer of Dodge, Chrysler, Jeep and Ram models. The automaker is also offering discounts of up to $3,600 on certain versions of the Dodge Durango sport utility vehicle.“It seems like we may be headed back toward incentives and overproduction,” Mr. Lutz said. “It’s not there yet, but it’s getting close.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Floating Traffic Jam That Freaked Us All Out

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    Southern California appeared to be under siege from a blockade.More than 50 enormous vessels bobbed in the frigid waters of the Pacific Ocean, marooned off the twin ports of Los Angeles and Long Beach, Calif. As days stretched into weeks, they waited their turn to pull up to the docks and disgorge their cargo. Rubberneckers flocked to the water’s edge with binoculars, trying to count the ships that stretched to the inky horizon.This was no act of war. This was what it looked like when the global economy came shuddering to a halt.It was October 2021, and the planet had been seized by the worst pandemic in a century. International commerce was rife with bewildering dysfunction. Basic geography itself seemed reconfigured, as if the oceans had stretched wider, adding to the distance separating the factories of China from the superstores of the United States.Given the scale of container ships — the largest were longer than four times the height of the Statue of Liberty — any single vessel held at anchor indicated that enormous volumes of orders were not reaching their intended destinations. The decks of the ships were stacked to the skies with containers loaded with the components of contemporary life — from clothing and electronics to drums full of chemicals used to concoct other products like paint and pharmaceuticals.Japanese Kit Kats on a shelf at 99 Ranch Market in Gardena, Calif.Adam Amengual for The New York TimesThe Port of Los Angeles.Erin Schaff/The New York TimesAmong the ships held in the queue was the CSCL Spring, a Hong Kong-flagged vessel that was carrying a whopping 138 containers from Yihai Kerry International, a major Chinese agricultural conglomerate. Together, they held 7.3 million pounds of canola meal pellets — enough animal feed to sustain 20,000 cows for a week. Their delay was exacerbating shortages of feed afflicting livestock producers in the United States.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Another Wayward Container Ship Shows World Trade’s Fragility

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    The destruction of a Baltimore bridge is hampering a busy port, adding to the strains confronting the global supply chain.Even before an enormous container ship rammed a bridge in Baltimore in the early hours of Tuesday, sending the span hurtling into the Patapsco River, and halting cargo traffic at a major American port, there was ample reason to worry about the troubles dogging the global supply chain.Between swirling geopolitical winds, the variables of climate change and continued disruptions resulting from the pandemic, the risks of depending on ships to carry goods around the planet were already conspicuous. The pitfalls of relying on factories across oceans to supply everyday items like clothing and critical wares like medical devices were at once vivid and unrelenting.Off Yemen, Houthi rebels have been firing missiles at container ships in what they say is a show of solidarity with Palestinians in the Gaza Strip. That has forced ocean carriers to largely bypass the Suez Canal, the vital waterway linking Asia to Europe, and instead circumnavigate Africa — adding days and weeks to journeys, while forcing vessels to burn additional fuel.In Central America, a dearth of rainfall, linked to climate change, has limited passage through the Panama Canal. That has impeded a crucial link between the Atlantic and the Pacific, delaying shipments to the East Coast of the United States from Asia.These episodes have played out amid memories of another recent blow to commerce: the closing of the Suez Canal three years ago, when the container ship Ever Given hit the side of the waterway and got stuck. While the vessel sat, and social media filled with memes of modern life stopped, traffic halted for six days, freezing trade estimated at $10 billion a day.Now the world has gained another visual encapsulation of globalization’s fragility through the abrupt and stunning elimination of a major bridge in an industrial city distinguished by its busy docks.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Why the Panama Canal Didn’t Lose Money When Ship Crossings Fell

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    A water shortage forced officials to reduce traffic, but higher fees increased revenue.Low water levels have forced officials to slash the number of ships that are allowed through the Panama Canal, disrupting global supply chains and pushing up transportation costs.But, remarkably, the big drop in ship traffic has not — at least so far — led to a financial crunch for the canal, which passes on much of its toll revenue to Panama’s government.That’s because the canal authority introduced hefty increases in tolls before the water crisis started. In addition, shipping companies have been willing to pay large sums in special auctions to secure one of the reduced number of crossings.In the 12 months through September, the canal’s revenue rose 15 percent, to nearly $5 billion, even though the tonnage shipped through the canal fell 1.5 percent.The Panama Canal Authority declined to say how much money it earned from auctions. At a maritime conference last week in Stamford, Conn., Ilya Espino de Marotta, the canal’s deputy administrator, said the auction fees, which reached as much as $4 million per passage last year, “helped a little bit.”But even now, during a quieter season for global shipping, auction fees can double the cost of using the canal. This month, Avance Gas, which ships liquefied petroleum gas, paid a $401,000 auction fee and $400,000 for the regular toll, said Oystein Kalleklev, the company’s chief executive. Auction fees are ultimately borne by the company whose goods are being shipped.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Awards $1.5 Billion to Chipmaker GlobalFoundries

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    The grant will go toward chips for the auto and defense industries, and is the largest award to date from $39 billion in government funding.The Biden administration on Monday announced a $1.5 billion award to the New York-based chipmaker GlobalFoundries, one of the first sizable grants from a government program aimed at revitalizing semiconductor manufacturing in the United States.As part of the plan to bolster GlobalFoundries, the administration will also make available another $1.6 billion in federal loans. The grants are expected to triple the company’s production capacity in the state of New York over ten years.The funding represents an effort by the Biden administration and lawmakers of both parties to try to revitalize American semiconductor manufacturing. Currently, just 12 percent of chips are made in the United States, with the bulk manufactured in Asia. America’s reliance on foreign sources of chips became an issue in the early part of the pandemic, when automakers and other manufacturers had to delay or shutter production amid a dearth of critical chips.The award to GlobalFoundries will help the firm expand its existing facility in Malta, N.Y., enabling it to fulfill a contract with General Motors to ensure dedicated chip production for its cars.It will also help GlobalFoundries build a new facility to manufacture critical chips that are not currently being made in the United States. That includes a new class of semiconductors suited for use in satellites because they can survive high doses of radiation.The money will also be used to upgrade the company’s operations in Vermont, creating the first U.S. facility capable of producing a kind of chip used in electric vehicles, the power grid, and 5G and 6G smartphones. If not for the investment, administration officials said the facility in Vermont would have faced closure.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Awards Chip Supplier $162 Million to Bolster Critical Industries

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    The Biden administration said its second grant under a new program would help Microchip Technology expand its facilities in Oregon and Colorado.The Biden administration on Thursday announced plans to provide $162 million in federal grants to Microchip Technology, an Arizona-based semiconductor company that supplies the automotive, defense and other industries.The agreement is the second award announced under a new program intended to help ensure that American companies that rely on semiconductors have a stable supply. Last month, the Biden administration announced a $35 million grant for BAE Systems, a defense contractor.The investment will enable Microchip to increase its production of semiconductors that are used in cars, airplanes, appliances, medical devices and military products. The administration said it expected the award to create more than 700 jobs in construction and manufacturing.“Today’s announcement with Microchip is a meaningful step in our efforts to bolster the supply chain for legacy semiconductors that are in everything from cars to washing machines to missiles,” Commerce Secretary Gina M. Raimondo said in a statement.Microchip plans to use $90 million to modernize and expand a facility in Colorado Springs and $72 million to expand a facility in Gresham, Ore. The administration said the funding would help Microchip triple its output at the two sites and decrease the company’s reliance on foreign facilities to help make its products.The company’s chips aren’t cutting-edge but are key components of nearly every military and space program. Microchip is one of the largest suppliers of semiconductors to the defense industrial base and a designated trusted foundry for the military. It also plays a crucial role in industries that are important for the national economy, U.S. officials said.That role became more obvious during the pandemic, when a global chip shortage cast a spotlight on domestic suppliers like Microchip. With foreign chip factories shut down to help contain the virus, automakers and other companies scrambled to secure supplies. As a result, demand for Microchip’s products surged.Those shortages also helped motivate lawmakers to pull together a funding bill aimed at shoring up American manufacturing and reduce reliance on foreign chips. The 2022 CHIPS and Science Act gave the Commerce Department $53 billion to invest in the semiconductor industry, including $39 billion for federal grants to encourage chip companies to set up U.S. facilities.The Commerce Department is expected to begin announcing larger awards in the coming months for major chip fabrication facilities owned by companies like Intel and Taiwan Semiconductor Manufacturing Company, known as TSMC.Microchip previously announced plans to increase its capacity in both Oregon and Colorado, but the government funding would be used to expand those enhancements and bring more production back to the United States, officials said. According to its filings, Microchip relies on outside facilities to make a significant proportion of its products — roughly 63 percent of its net sales in 2023 — a relatively common practice in the industry.While attention has focused on ensuring that U.S. facilities can manufacture some of the world’s most advanced chips, there are growing concerns about Chinese investments in less advanced semiconductors, also known as legacy chips, which help power cars, computers, missiles and dishwashers.U.S. officials are questioning whether such investments could increase the United States’ reliance on China or allow Chinese firms to undercut competitors. The Commerce Department has said it plans to begin a survey this month to identify how U.S. companies are getting their legacy chips and reduce security risks linked to China.The deal announced Thursday is a nonbinding preliminary agreement. The Commerce Department will carry out due diligence on the project before reaching the award’s final terms.The department said it had received more than 570 statements of interest and more than 170 pre-applications, full applications and concept plans from companies and organizations interested in the funding.Don Clark More