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The Los Angeles and Long Beach port complex, which handles about a third of the nation’s container shipments, is expected to be hard hit by the escalating trade war between the U.S. and its trading partners.

Anticipation of President Trump’s tariffs spurred a rush of imports that pushed cargo volumes to record levels at the San Pedro Bay ports in November as companies loaded up on goods.

That wave has subsided and, assuming the tariffs announced on April 2 continue in place, they could lead to a 10% drop in cargo volume moving through the Port of Los Angeles in the second half of this year, Gene Seroka, the Port’s executive director, told the Los Angeles Times.

“This is the widest sweeping tariff regime we’ve witnessed,” Seroka said. “Fewer containers coming to the Port of Los Angeles means fewer jobs.”

Seroka noted that the communities' ability to recover from the January wildfires is particularly reliant on imported goods. “We need lumber from Canada, appliances from Mexico; aluminum, steel, copper and furniture from China,” he said, calling the tariffs “the highest tax we’ve ever seen.”

“Certainly, if we have reduced container volume and more specifically imports, be it from China or Southeast Asia, it would have an impact on jobs,” Mario Cordero, CEO of the Port of Long Beach, told CBS News.

Cordero said job security at the ports will depend on how the tariffs play out over the next six months. “There’s no need to react right now in terms of imagining worst scenarios,” he said.

Any slowdown at the L.A. ports will ripple deeply through the Southern California economy. According to a report from the Los Angeles County Economic Development Corp., the transportation, trade and utilities sector is one of the area's largest employment clusters, with an estimated 830,000 workers last year.

A major part of the region’s economy is based on importing goods from Southeast Asia. Chinese goods account for 39% of the imports at the Port of L.A. and 62% of the imports at the Port of Long Beach; between the two ports, a total of 186,000 people work in international trade, according to CBS News.

“The single most important part of the economy, in terms of employment (and) economic activity, in the L.A. area is logistics, basically the imports, exports, shipment of goods,” Kevin Klowden, an economist with the Milken Institute in Santa Monica, told the Times.

“There will be fewer employment opportunities at the ports and throughout the supply chain that goes from the ports well into the Inland Empire, where huge numbers of containers are processed every day,” said Jock O’Connell, an international trade advisor at L.A.’s Beacon Economics.

Logistics employs 265,000 people in the two-county Inland Empire, according to CBS data.

The manufacturing sector in Los Angeles, which employed an estimated 313,000 workers last year, has been boosted in recent months by a new generation of South Bay aerospace companies. Many of these companies rely on components manufactured in Asia that now face steeper tariffs, which will raise the cost of domestically produced goods sold in the U.S. and for exports.

“It’s going to have a huge, huge impact on manufacturing and supply chains throughout California,” Klowden said. “We don’t have the specialized manufacturing for all of these supply chains, and certainly not at cost in the U.S.”

Companies that decoupled their supply chains from China and are now sourcing components from other Southeast Asia nations will not be spared the impact of the new tariffs, which are also targeting Japan, South Korea, India and Vietnam. China has announced that it will reciprocate by imposing a 34% tariff on U.S. goods.

Cupertino-based tech giant Apple has decided it will send more iPhones to the U.S. market from India, to avoid the cumulative 54% increase on the tariff for the technology made in China. Instead, Apple will be hit with a 26% tariff now imposed on by the Trump Administration on products made in India, The Wall Street Journal reported.

California exports will be ripe targets for reciprocation if the trade war escalates. Last year, the Golden State exported $160B in manufactured goods, including nearly $50B in computer and electronics products, $19B in machinery and $16B in chemicals.

Gov. Gavin Newsom has announced he is directing the state to pursue its own trade relationships outside the federal government, asking trading partners to exempt California goods from any retaliatory tariffs. With a GDP of nearly $4T, California is the largest importer and second-largest exporter among states.

Newsom said the new U.S. tariffs will cause major disruption to the existing cross-border supply chain in the California-Baja mega-region, a fully integrated North American manufacturing hub that sends parts and goods back and forth across the border.

“If these goods are taxed each time they cross the border, the price of the final product will rise and ultimately be passed on to California consumers. This will have far-reaching impacts, affecting everything from semiconductors to aerospace and automotive products,” Newsom said in a statement.

The commercial real estate industry faces a pivotal moment in 2025 as refinancing challenges mount amidst a record $957 billion in loans set to mature, a significant increase from last year’s total. This growing maturity wave, fueled by extended loans from 2024, underscores the shifting dynamics within the sector. While some experts had hoped for relief through Federal Reserve rate cuts, recent indications suggest that rates may stabilize rather than decline further, leaving borrowers grappling with refinancing pressures and elevated debt service costs.

Jeff Havsy, commercial real estate industry practice lead at Moody’s CRE, and Kevin Fagan, senior director and head of CRE economic analysis, highlighted this evolving scenario during a recent video discussion. They emphasized the transition from what was once termed a "maturity wall" to a "maturity wave," reflecting the accumulation of loan maturities over time due to lenders’ widespread adoption of "extend and pretend" practices. This strategy has allowed banks to defer final actions on troubled loans by extending their terms, effectively pushing maturities into future years. Fagan noted that what was initially projected as $573 billion in manageable maturities for 2025 has now surged to nearly $957 billion.

The implications are stark for office properties, which continue to bear the brunt of refinancing stress due to high vacancy rates and the shift toward hybrid work models. Fagan warned that delinquency rates for office loans could climb to as high as 18% this year if interest rates remain elevated—a scenario he described as potentially leading to “a pretty ugly 2025.” Multifamily properties, on the other hand, may see cap rates loosen as refinancing opportunities improve slightly under stable interest rate conditions.

This is not the first time CRE has faced such challenges. Fagan referenced similar issues during the Global Financial Crisis in 2007 when 10-year-term CMBS loans matured en masse. While some resolutions were achieved through workouts and extensions back then, today’s situation is compounded by shorter loan terms—nearly four-fifths of current loans are five-year terms—and higher leverage ratios, making refinancing more complex than ever.

Despite these hurdles, there are glimmers of optimism within specific sectors. Havsy noted that office owners and borrowers see signs of stabilization in valuations and transaction activity. Additionally, multifamily lending is projected to grow significantly in 2025, with an expected volume of $361 billion—a 16% increase from last year—driven by improving fundamentals and investor interest in residential assets.

Looking ahead, the CRE industry must balance refinancing pressures and broader macroeconomic trends. Stabilizing interest rates could provide some relief for borrowers and lenders alike, but lingering uncertainties around global economic conditions and regulatory challenges remain key risks.

As Havsy remarked, unless rates drop significantly or market conditions improve dramatically, banks may soon face difficult decisions about liquidating non-performing loans—a move that could reshape the industry’s landscape in the years to come.