Shipping industry braces for a hit from Trump’s tariff

Southwest Washington’s Columbia River international exporters are bracing for the Trump administration’s ever-intensifying trade war. Many importers already feel the pain. The president’s aggressive suite of protectionist policies aim to dramatically reduce the flow of Chinese goods coming into U.S. ports. But the policies have also disrupted the Columbia River shipping industry, which moves about $31 billion in goods each year and serves as the backbone of Southwest Washington’s economy. Regional shipping industry experts and insiders said the number of ships importing and exporting goods to and from Southwest Washington’s Columbia River ports appears to be steady so far this year despite the barrage of tariffs. But the region’s export-heavy ports stand to see their business dry up this fall as Trump administration policies and resulting retaliatory tariffs take effect. Regional trade and business leaders cautioned that will likely hurt Southwest Washington’s economy and cost people jobs. ‘It costs me, you, everybody’ Danny Younce is the executive vice president for NAPSteel and Cascadia Metals. The steel product distribution companies employ about 130 people, with most located at their 200,000-square-foot Port of Longview plant. “I had probably between 15,000 and 20,000 tons of material ordered at the time that they announced the tariffs. And, of that, 20 percent of it was coming in from offshore,” Younce said. With the price of steel hovering around $1,000 per ton and the Trump administration’s steel tariffs charging 25 percent of the purchase price, the policy quickly cost Younce millions of dollars. That’s despite none of the steel coming from China. Younce is an affable independent who talks little of political partisanship. He instead focuses on creating the exact type of high-paying jobs people without college degrees can raise a family on, jobs politicians from both parties endlessly claim to boost. But he described the new trade policies’ dramatic impacts on the region in matter-of-fact terms. “This could close businesses. It can run people out of business. I think back when the stock market crashed, you had people jumping off buildings,” he said. “When (steel is) brought in, if it’s taxed or if it’s tariffed, what’s the difference? It costs me, you, everybody who buys.” While NAPSteel and Cascadia Metals are large enough to weather these situations even with tariffs eating into their profits, smaller companies may not be able to stay afloat in the competitive industry. Younce said he’s also seeing the cost increases and instability slow down development projects across the West as businesses pause projects until material costs settle. In addition to NAPSteel and Cascadia Metals, the Port of Longview is home to two other major companies that import steel, said Dale Lewis, director of external affairs for the port. But steel isn’t the region’s only import. Subaru sent nearly 80,000 cars to the Port of Vancouver last year. And new Trump administration tariffs on auto imports and fees on foreign-built vehicle carriers will likely affect Southwest Washington, said Casey Bowman, director of communications for the port. “Whether that will alter the number of vessel calls later in the year still remains to be seen,” he said. (“Call” is the industry term for a ship stopping at the port.) Subaru warned its U.S. retailers that tariffs “would severely impact Subaru’s activities in the U.S.” However, it hasn’t yet put a dollar amount to the harm. But fellow Japanese automaker Toyota, which has similar operations at the Port of Portland, said Thursday the tariffs cost it more than a billion dollars for April and May alone. Trying to look ahead While importers like Younce and shipping container operations along the Puget Sound are feeling the immediate impacts of the Trump administration’s trade and economic policies, the ports of Longview, Kalama and Vancouver have mostly been insulated so far. That’s because they’re mostly export ports. They won’t feel the impacts of trade war policies until countries that import Washington goods strike back at the U.S. with their own tariffs. Columbia River shipping insiders said the number of ships in the river remains the same this year. But many were instead focused on understanding why that is, and if that will taper off. Curtis Cannizzaro runs Merchants Exchange, a roughly 145-year-old Columbia River shipping traffic data broker in Portland. He said the region’s steady import traffic may be because shippers are trying to get goods in before the Trump administration’s tariffs hit. The issue is complicated on the export side, too. “A lot of these vessel calls are coordinated based on agreements that are put in place months in advance,” he said. “And so the question would be, ‘Are there orders being put in place later on in the year for those same goods to either come in, such as auto, or to go out, on things like grain?’ ” Grain impacts Augusto Bassanini, president of Vancouver-based United Grain Corporation, can answer that. The company generally starts making transactions for the fall-through-winter export season now, but Bassanini said “we’re obviously not seeing any” so far this year. United Grain also usually starts to place bids for commodities from growers around this time. “We’re not able to do that because of the uncertainty around the China matter at this time,” he said. Grain is the centerpiece of Columbia River exports. More than 50 percent of U.S. wheat exports leave the country through the Columbia River system. It’s the third largest grain export gateway in the world. The ports of Vancouver, Kalama and Longview collectively exported 30.5 million metric tons of corn, wheat, soybeans and other agricultural commodities in 2024, according to a report from the Pacific Merchant Shipping Association. Soybeans accounted for about 7.2 million metric tons. And China was the top destination for exports among the three ports, receiving nearly one-third of the ports’ commodities, according to the report. United Grain exported 23 vessels worth of goods to China last year, Bassanini said. But he now worries the friction between the U.S. and China might extend into the fall shipping season. “That’s going to have a significant impact on our business and all the associated jobs that come with it,” he said. The U.S. has also levied tariffs on other major grain customers, including Japan, the Philippines and South Korea. While President Donald Trump delayed the start of those tariffs and has previously flip-flopped, they’re currently still set to take effect July 8. “We compete on a global scale where cost is a major factor in determining where markets source their products, but reliability and dependability are also important,” Bassanini said. “Despite the 90-day pause, the market is already reacting to the tariff proposal, and we’re currently losing sales to South America.” Neil Maunu is also seeing the local impacts of national trade and economic policies. He runs the Pacific Northwest Waterways Association, which is a leading regional nonpartisan trade association representing more than 150 shippers, ports, businesses and public agencies. “We have heard that there were grain elevators on the lower Columbia River that had at least one vessel cancel because of tariffs,” he said. Web of policies As dramatic as the potential impacts are, Maunu said they were worse before the Trump administration scaled back a policy targeting Chinese owned, operated or manufactured ships for large fees. But Maunu said the remaining ship fee policy, especially when combined with tariffs and fees on imported cars, still stands to hurt shippers and the broader regional economy. “Yes, the vessel owner is going to be charged the fee, but she or he is passing that on to the port potentially, and it gets all the way passed back to the shipper, and it’s going to hurt,” he said. “So, until we have a way of giving a rebate or giving something back to incentivize shippers to keep shipping, it’s going to be very difficult to stomach and keep folks in business.” Maunu said the sum of the Trump administration’s current policies will make it harder and more expensive for Southwest Washington businesses to remain competitive on the global market — and he warned that could have grave consequences. “We’re going to force … global markets to find other solutions outside of some of these U.S. products,” he said, referring to grain and soda ash in particular. Michelle Hennings, executive director of the Washington Association of Wheat Growers, said the same. But she added that because the Columbia River’s export system is the envy of the world, it has inspired development elsewhere, which has, in turn, become the system’s competition. She cautioned that if we lose trade relationships, they can be difficult to rebuild. “There’s competition for price in different countries,” she said. “Those relationships are vital. And, if something happens to that, it’s going to be devastating.” Henry Brannan: 360-735-4530; henry.brannan@columbian.com; @henry_brannan About the project: The Murrow News Fellowship is a state-funded journalism project managed by Washington State University. Local partners are The Columbian and The Daily News. For more information, visit news-fellowship.murrow.wsu.edu/ Sarah Wolf: 360-735-4513; sarah.wolf@columbian.com

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