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TRADE - Los Angeles County has always been the center for new ideas, industries, and trade. LA's strong economy and business have always made it a destination for international investors. This is why the country is a firm ground for global trade. Los Angeles has many opportunities for international investors in sectors ranging from business and technology to education and entertainment. Plus, the city has multicultural tolerance that makes it conducive for businesses. Due to this, when international trade policies are introduced, they might affect some industries in Los Angeles. Let’s look closer at Los Angeles industries and the focus on international trade policies.
Los Angeles As the Center for International Trade
Forbes named Los Angeles ‘The World Center of Business’ and ‘The Creative Capital of the World’ in 2019. The city is known for being conducive to local or international businesses and for attracting global investors. There are different reasons why Los Angeles is a center for international trade. Here are some reasons why this famous city is tagged as the best place for global trade.
Impressive Sea Ports
The twin ports in Los Angeles County have millions of 20-foot containers coming in every year, making it one of the busiest ports in the world. The ports are well-equipped and can handle some of the most significant containers. This makes it easier for businesses to enjoy imports and exports.
International Business Travels and Air Freights
Aside from the LA ports, another part of the county that makes it great for investments is LA International Airport (LAX). This airport is ranked 5th in the US and 14th in the world regarding air cargo. The airport has 900 weekly non-stop business travelers and 43 international carriers on the air freight lines. It makes importing and exporting high-value goods accessible, and business travelers can easily travel.
Booming Rail Networks
LA County has also invested heavily in its rail transportation system, which complements its seaport and air freight systems. The rail network is driven by technology and allows quick rail transportation from LA to other counties. This will enable businesses to deliver goods across the country efficiently.
Foreign Direct Investments
LA County has been the target of increasing foreign investment, especially from Asian and European investors. Business owners must consider foreign exchange markets and currency pairs like EUR/USD and Asian currencies like USD/SGD and USD/CNY.
One of the factors that plays a vital role in the economic landscape of LA is currency fluctuations, like the EUR/USD exchange rate. Los Angeles is intricately connected to the movements of the currency pair as industries monitor the exchange rate. This rate affects the cost of imported materials and export competitiveness. This currency pair can also impact tourism flows and consumer spending patterns that affect businesses in the hospitality and retail industries.
Top Industries in Los Angeles
Los Angeles is bustling with different industries, including mature trade, entertainment, digital media, and aerospace sectors. Los Angeles has always been known as the home of the Hollywood film industry, the largest in the world in revenue.
Other significant industries in the city include hospitality and retail, primarily due to the influx of tourists. Tourism is a considerable industry, along with healthcare, manufacturing, fashion, transportation, real estate, and construction. These industries are interconnected with global markets to adapt to changes in international trade policies.
Direct and Indirect Effects on Various Industries in LA
Los Angeles is a trading hub for many United States imports and exports. Shifts in international trade policies will directly and indirectly affect different LA industries.
Manufacturing
Trade policies like trade agreements and tariffs can affect the price of imported raw materials for manufacturers in Los Angeles. For instance, tariffs on steel and aluminum imports can increase the production costs for aerospace companies like Boeing and SpaceX in LA.
Logistics and Transportation
Changes in trade policies also disrupt the supply chain and increase shipping costs for businesses importing and exporting through the port of Los Angeles. Tariffs are imposed on goods imported into the city, which depends on efficient logistics. So, when logistics is affected because of policies, tariffs, and other regulatory issues, major retailers like Amazon are affected. This negatively impacts customer service and experience, costing the business additional operational fees.
Technology and Innovation
Los Angeles is known as the home of technology and innovation, with firms like Snapchat and Riot Games that rely on global markets for their digital products and services. Trade policies affect intellectual property protection and cross-border investment in LA, which affects tech companies in the area. Many of these companies have huge international ties and a global user base, so ensuring profitable trade policies ensures global improvements in innovation.
Entertainment
International trade policies related to intellectual property rights and market access can affect the entertainment industry in LA. It would primarily affect the distribution of Hollywood movies abroad. There are trade agreements that reduce the barriers to cultural exchange that can benefit Hollywood. [1] For instance, the Trans Pacific Partnership expanded copyrights, which raised Hollywood's profit. The Motion Picture Association (MPAA) also influences bilateral partnerships between the USA and other countries to protect the interests of Hollywood.
Tourism and Hospitality
The tourism and hospitality industries help each other in LA but are mainly affected by visa policies and exchange rates. Changes in diplomatic relations can affect tourism flows[2] at attractions like Universal Studios Hollywood and Disneyland. It also affects hotels and restaurants. For example, the strained relations and trade war between the United States and China led to a decline in Chinese tourist arrivals to Los Angeles. This was noticeable since China is one of the largest sources of international tourists in LA. The further devaluation of the Chinese yuan against the US dollar further discouraged Chinese tourists in LA.
Exploring International Trade in LA
Los Angeles industries are highly connected with global markets, which makes it essential for business owners and investors to monitor international trade policies and adapt to changes. This way, they can sustain economic growth. Collaboration between governments, trade associations, and industry stakeholders can help mitigate potential risks and navigate international trade. Now that you’re aware of how global policy changes could affect LA industries and their global user bases, it’s easy to spot emerging opportunities.
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