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Laredo, Texas becomes No. 1 U.S. trade hub

Officials want to expand operations at Laredo International Airport to bring more cargo trade to Port Laredo. Image: U.S. Customs and Border Protection

For the first time in its 168-year history, Port Laredo is No. 1. Laredo surpassed Los Angeles as the nation’s busiest trade hub, including airports, seaports and international border crossings.

Port Laredo did $20.09 billion in trade during the month of March (according to the latest Census Bureau numbers available and analyzed by WorldCity), while the Port of Los Angeles did $19.66 billion. Laredo’s trade was up 9.52 percent from February while Port of Los Angeles trade was down 10.01 percent, said Ken Roberts, president of WorldCity.

“It is further evidence that the U.S.-China trade war is scrambling the deck chairs of U.S. trade,” Roberts wrote in Forbes on May 21. “At work, in part, is how important Mexico trade is to Laredo and how important China trade is to Los Angeles.”

The tension with China has affected volumes at the Port of Los Angeles, where the bulk of the U.S. imports from Asia are delivered. “At the Port of Los Angeles, trade with China accounted for 51 percent of the port’s trade in 2018. That’s down to 45 percent  through the first quarter of this year and 36 percent for the month of March,” Roberts said.

Since April 2018, President Donald Trump has ordered tariffs of 10 to 25 percent on $250 billion of Chinese imports. The tariffs cover everything from steel and aluminum used in manufacturing, to solar panels, to fruit juices and leather handbags.

In retaliation, China has imposed tariffs of up to 25 percent on $60 billion of U.S. imported goods, such as soy beans, pork and grains.

The result has catapulted Mexico to the top of the United States’ leading trade partners, having replaced China and Canada. Auto parts and engines manufactured in Mexico account for about half the U.S.-Mexico trade through Laredo.

Much of the truck freight that passes through Port Laredo goes through the World Trade Bridge, five miles east of downtown Laredo, a border city of around 260,000 people located 157 miles from San Antonio.

“No other port has handled more trade with one country than Laredo does with Mexico, more than $228 billion in 2018. That’s because last year and this year, Mexico has accounted for more than 97 percent of all Port Laredo trade,” Roberts said.

“This is fantastic news for our city and for our residents,” Laredo Mayor Pete Saenz said. “Laredo has been the number one land port for quite some time, but now we have taken first place among all U.S. ports, as well as all ports in the Western hemisphere. This is truly an example of how partnerships between government and the private sector can produce remarkable results that benefit our people.”

Whether Port Laredo retains its top spot for long remains to be seen. In late May, President Trump threatened to punish Mexico with 5 to 25 percent tariffs until it lessens the flow of migrants flowing across the border.

Saenz has slammed the president’s threats and said that tariffs and immigration are both separate issues.

“The Texas Border Coalition strongly opposes President Trump’s threat to impose unilateral tariffs on Mexican imports. Our analysis suggests the tariffs may not rest on firm constitutional or legal ground, and probably violate international agreements including the North American Free Trade Agreement and those underlying the World Trade Organization,” Saenz said in a statement. “While border communities are bearing the overwhelming burden of helping to deal with the crushing numbers of Central Americans seeking asylum in our country, the President’s threat to impose tariffs is not an appropriate response and would likely make the situation worse.”

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Maryland and Texas. Contact [email protected]