Georgia’s deepwater ports are responsible for $174 billion in sales, representing 11% of the state’s total sales. That’s $77 billion in Gross Domestic Product (GDP), or 9% of Georgia’s total GDP. More than 650,000 jobs, full-time and part-time, are supported by the ports.
High on the list of imports coming into the Georgia ports are retail consumer goods, including furniture, automotive, and electronics. Goods that are then distributed across the CSRA, Georgia, and the rest of the country, generating income for businesses.
A recent report by the National Labor Federation (NRF) is raising the alarm about how tariffs will impact the flow of goods and services.
“We have seen the implementation of reciprocal tariffs across the globe, with a number of key trading partners being subjected to tariffs higher than the earlier 10% tariffs,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a news release. “We also continue to see more and more sectoral tariffs impacting a wider scope of products.
Fabio Batista, Chief Commercial Officer of the Georgia Ports Authority (GPA), told Metro Augusta business leaders that tariffs are beginning to impact business in the Georgia ports.
“Automobiles now, or machines, 15, 30, up to 50% tariffs on some of those cargoes,” he said. “But we want to continue building for the future. So, we’re building a fourth berth now in Brunswick that will help us to continue building and bringing more customers, more ocean cargo to Brunswick.”
The slowdown follows what NRF called a near-record peak in import cargo volume at the nation’s major container ports, including Georgia’s. The burst of activity in the spring and summer months was believed to be retailers’ stockpiling merchandise ahead of the implementation of reciprocal tariffs.
“Retailers have stocked up as much as they can ahead of tariff increases, but the uncertainty of U.S. trade policy is making it impossible to make the long-term plans that are critical to future business success,” said Gold. “These tariffs and disruptions to the supply chain are adding costs that will ultimately lead to higher prices for American consumers.”
Batista told ABD activity at Georgia’s deepwater ports of Savannah and Brunswick were strong through the summer on into August, and the early part of September. He attributed that to customers increasing imports to stockpile merchandise.
“After that, we kind of lose visibility a little bit,” he said. “We believe for the next quarter, or the next two quarters, it’s going to be a little drop in volume, but then it’s steady. A lot of customers we talk to, they’re saying the next six months will be flat, but not flat on the high side, flat more based on the normalization now, after they pulled so much cargo forward.”
Batista, who spoke at the Metro Augusta Chamber of Commerce’s September Member Economic luncheon, also said they are seeing a shift in countries of origin for imports.
“A lot of production, whether it’s furniture or clothing, like apparel, is moving from China to Vietnam to Cambodia,” he explained. “India was taking off, and it was going very fast, but now they still have 50% tariffs on Indian products. So, you might see a slight decrease in India imports into the US, until tariffs are also sorted out there. But India is going to be a big partner of any port in the US.”
In April, Chris Clark, President and CEO of the Georgia Chamber of Commerce, encouraged Georgia businesses to build up their inventory in advance of anticipated increases in tariffs on incoming goods. He also advised looking for more non-traditional suppliers.
“I’ve encouraged the small businesses I’ve talked with to look at India, look at Indonesia, look at other market partners right now, and go ahead and start ordering and diversifying your product line today. You should not wait, thinking that in 90 days, this will all go away and be better. I think, particularly on the Chinese front, we’re in for a long haul here.”
Much of the uncertainty about the health of the supply chain in the coming months is connected to the wait for final answers on what reciprocal tariffs will and will not be imposed and at what percentage. While a federal appeals court ruled against the use of the International Emergency Economic Powers Act, it allowed the tariffs to remain in place pending an appeal to the U.S. Supreme Court.
In addition to the impact Georgia ports have on the state’s sales, GDP, and employment, the latest numbers also show billions generated in tax income.
- $10 billion in federal taxes
- $3 billion in state taxes
- $3 billion in local taxes
“That was some astounding information,” said Angie Cox, President and CEO of the Metro Augusta Chamber. “I think that what we don’t realize is that nearly every aspect, from our office, our clothing, our car, and the machines that we utilize, product-wise, is probably related in some way to the port, so it definitely has an impact on our region. We’re very fortunate to have that resource, that natural resource, and the ability to utilize it just two and a half hours if you float down the river.”
Over the long term, Batista expects Georgia ports will continue to be one of the top engines of economic development and job creation.
Two other relevant stories on the impact of tariffs in the CSRA have been addressed in recent ABD reports from Hull College of Business professor, Dr. Rick Franza, and AU Economics Professor, Dr. Simon Medcalfe.
https://augustabusinessdaily.com/while-tariffs-may-hurt-uncertainty-kills/
https://augustabusinessdaily.com/simon-says-tariff-impact-on-imports-exports-at-georgia-ports/
