Longview port CEO worries that second trade war may disrupt No. 1 export

China has not yet targeted U.S. grain exports, but it did in 2018; Port of Kalama CEO confident that port's grain, steel tenants will weather the storm

This story has been updated to include additional grain export statistics for the Port of Longview. See the italicized paragraph.

\Port of Longview CEO Dan Stahl is nervously awaiting China’s response to President Donald Trump’s tariffs and whether it hits the port and local economy in the breadbasket.

His worry? That the president’s 10% percent tariff on Chinese imports could trigger a retaliation in a big area of port business — grain exports.

“This is a very fluid situation that is evolving very quickly,” Stahl said in a phone interview last week. “The trade we have with China is principally in grain. That is a commodity market. It is never static. ... It is very dynamic.”

Trump’s tariffs on China and 25% tariffs on goods from Mexico and Canada are a major concern for Washington, which has consistently ranked in the nation’s top five states in exports during the last decade, according to the state Office of Financial Management.

Some of that business could be put at risk as the tariffs fuel a trade war that raises the price of U.S. export products to uncompetitive levels. China earlier this month imposed its own tariffs on American coal, liquefied natural gas, and machinery. It also restricted exports of key minerals.

The trade war escalated this week when the president imposed a 25% tariff on all steel and aluminum imports into the United States. Indirectly, the tariffs are aimed at China, the world’s largest producer of steel.

Grain and other agricultural products have not yet been caught up in the trade war, but they were in 2018 during the first Trump administration.

That conflict appears to have hit the Port of Longview hard, but it is hard to say for sure because grain export levels often flux. Grain exports there hit a 10-year high of 8.1 million tons in 2018, but they fell to nearly half as much — 4.5 tons — in 2019, according to port records. Since then grain exports have generally ranged from 5.2 million to 6.9 millions tons, though they dropped to a 10-year low of 3 million in 2023. This record shows how changeable commodity exports can be.

The president says his latest tariffs are aimed at pressuring Canada, Mexico, and China to stem fentanyl trafficking into the U.S. and to reduce the nation’s trade deficits. But many economists fear the tariff battles will lead to higher consumer prices, job losses and disrupted supply lines.

The trade war puts a lot at stake for Washington and Lower Columbia River economies. The state exported $12.8 billion in agricultural products in 2023, accounting for 21 percent of Washington’s $61.2 billion in exports in 2023. Only transportation equipment, primarily aircraft and parts, were larger, accounting for 35% of Washington exports in 2023.

The Washington Council on International Trade estimates that exports and imports support 364,000 jobs in the state, according to The Seattle Times. China, Canada, Japan, Mexico, and South Korea are the biggest destinations for Washington exports.

The Port of Longview does little if any business with Canada and Mexico, but steel imported through Longview comes from South Korea and likely will be subject to the new 25% import tariff that Trump announced this week. Four steel-related businesses are located at the port: Cascadia Metals/NAPSteel; Brown Strauss Steel; Nucor / Skyline; and PNW Metal Recycling.

The port’s “break bulk” cargo import business also might also be affected. This involves cargo too large for containers, such as machinery; industrial equipment, including boilers and transformers; and wind turbines, although the port is not currently handling wind turbines.

These products especially help support longshore jobs. A longshore union representative did not return calls for comment.

Grain exports at the EGT grain terminal are the biggest concern for the port. Bulk agriculture exports such as wheat and soybeans traditionally account for the biggest portion of the port’s economic pop to the community.

Grain shipments to the Pacific Rim make up the largest share of the 10 million tons of cargo that the Port of Longview handled last year. They help make the port a business powerhouse that generates $2.6 billion in annual economic activity and supports 13,000 direct and indirect jobs, according to port figures.

Stahl did not know what portion of the port’s exports go to China, but it is significant. China is the largest importer of U.S. farm products.

However, China also buys large amounts of grain from Australia and Brazil and could easily shift more of its buying to those nations if it chooses to retaliate further against the U.S. tariffs, Stahl said.

China “doesn’t necessarily have to buy it from us … These are spot commodities (not subject to ) long-term agreements. So the Chinese are very flexible and strategic in who they buy from. They could switch (suppliers) today” if they want to, he said.

The Port of Kalama also is a major grain exporter, with two terminals —Temco and Kalama Export Co. — operating on port property. Mark Wilson, Port of Kalama’s CEO, said the two terminals weathered the 2018 trade war by finding markets for corn and wheat to overcome China’s tariff on soybeans.

Steelscape, a Port of Kalama tenant that employs about 250 workers to clean and coat coils of steel imported from Australia and Japan, could face higher costs because of Trump’s steel tariffs. The company has faced them several times before. It and port authorities managed to get exempted from the tariffs, and Wilson seemed confident Tuesday that they can do so again.

Wilson did not appear overly worried about the burgeoning trade conflict, saying that nations are still in a kind of jockeying stage.

“This is not my first rodeo” through this kind of tariff challenge, Wilson said, chuckling.

How much, and which tariffs remain in place after the dust settles is unpredictable, he said. Contracts already in place would delay some of the impacts of tariffs on American goods. Furthermore, tariffs are only one factor among many other in the complex and volatile commodities markets, Wilson explained.

“So many things affect the price of a soybean shipped from Kalama to a dock in China.”

Trump’s last trade war with China — in 2018 — did affect U.S farm products. In retaliation for Trump-imposed duties, Beijing imposed a 25% tariff on U.S. grain imports, from soybeans to sorghum.

During that trade tiff, U.S. farm exports to China collapsed to $9.1 billion in 2018, down from $ $21.4 billion in 2016, according to the U.S.Department of Agriculture.

That trade war pushed the U.S. trade deficit to its highest point since the Great Recession, $684.1 billion in the fourth quarter of 2018, according to the U.S. Bureau of Economic Analysis.

Taxpayers spent at least $28 billion to bail out farmers who were unable to export their crops, according to the Agriculture Department.

The trade war ended with a 2020 agreement that China would buy more U.S. grain and other agricultural products. Beijing’s purchases of U.S. food products peaked in 2022 but they have since fallen to the lows of the 2018 trade war.

Stahl could not say whether the U.S.-China grain agreement led to an uptick in the Port of Longview’s grain shipments.

And it’s unclear whether China met the overall terms of the 2020 agreement, which expired on December 3, 2021. A July 2022 paper by the independent Peterson Institute for International Economics reported that China had bought none of the extra $200 billion of U.S. exports that it agreed to in Trump's trade deal.

How the current situation shakes out for the Port of Longview remains uncertain.

“This is a serious issue for us,” Stahl said.

He noted that the 2018 trade dispute was “walked back. (So) we’re trying not to overreact. We are paying close attention and staying in touch with our customers because we want to do business with them. But they have choices.”