When President Trump unveiled plans to launch a trade war with China early last year, Marisa Bedrosian Kosters, an executive at an Anaheim-based ceramic tile and stone retailer, sprang into action.

Like many of the tens of thousands of retailers who move Chinese goods through Southern California’s giant port complex, Bedrosians Tile and Stone turbocharged its imports to get ahead of the threatened tariffs and other duties.

But when its new supplies from Foshan reached the Port of Long Beach, the company, which has outlets in 10 states, ran into a massive traffic jam. With thousands of extra containers piled up dockside, Kosters struggled to get her tiles off ships and onto trucks, incurring thousands of dollars in extra costs assessed by the terminals. And now she faces a supply glut. Her 389,000-square-foot tile distribution center is overflowing, and she has had to store more than 7,500 pallets outside.
“There’s no space inside,” she said. “We don’t have anywhere to put the materials.” Meanwhile, despite the bottlenecks, “We’re having to bring in more because there’s so much uncertainty about what country is being hit next.”

Perhaps nowhere in the United States is the tariff war with China having a more tangible effect than at the twin ports of Los Angeles and Long Beach, the nation’s leading gateway for trans-Pacific trade. The complex handles 47.5% of U.S. containerized trade with China — including toys, bicycles, furniture, electronics, sneakers, scrap paper, cotton, soybeans and auto parts.

The tariffs have thrown a giant wrench into Southern California logistics industries, rippling through a broad web of companies that handle shipping, trucking, railroads, warehousing, construction, manufacturing and farming. Nearly a million jobs in the five-county region are tied to international trade.

The tariff fallout has “really gummed up the operations of the supply chain,” said Eugene Seroka, executive director of the Port of Los Angeles. “We’ve got a lot of cargo coming in that just sits. Containers are stacked high. Truck lines are long. And warehouses are bursting at the seams.”

Trump has contended that U.S. manufacturers can fill the void as importers exit the China trade. But like many U.S. business executives, Kosters, the Anaheim tile merchant, doesn’t see how.

“For ceramic and porcelain tile, domestic producers currently only have capacity to produce about 30% of the U.S. market demand,” she said. “China is the largest exporter of ceramic tile to the U.S. [with] 31.5% of U.S. imports in square feet in 2018.”

Sourcing her inventory from other countries would mean “discontinuing more collections than I would like to think about and having to trash tens of millions of dollars in marketing materials,” she said. “Our company will also need to reinvest millions of dollars in marketing collateral for new replacement collections.”

Kosters is keeping a stiff upper lip.

“We’re doing the best we can to anticipate what the next moves will be and what other countries might be affected, or product segments,” she said. “We’re going to come out fine on the other side, but it’s still a huge, huge transition.”

FROM Los Angeles Times