A major debate is underway in Washington this week between U.S. officials and representatives of the American maritime, export and agricultural sectors, which was triggered by the imposition of additional tariffs on Chinese-made and Chinese-owned ships calling at U.S. ports.
The president’s plan calls for a revival of the local shipbuilding industry by imposing tariffs of up to $1.5 million on ships bound for China.
In arguing for the critical importance of imposing the tariffs, the USTR argues that Chinese government subsidies harm American businesses by limiting competition and investment opportunities, while also posing economic and national security risks that Beijing could use strategically in a potential conflict.
The measure, which enjoys bipartisan support in Congress, is intended to discourage ocean carriers from buying Chinese ships, while the proceeds from the tariffs would be used to revive the U.S. shipping industry.
These potential port fees have limited the availability of ships needed to deliver agricultural, energy, mining, construction, and manufacturing products to international consumers.
Shipowners have already withdrawn their bids to ship coal to the United States in the future, as a result of the USTR’s sanctions, Xcoal Energy & Resources CEO Ernie Thrasher said in a letter to U.S. Commerce Secretary Howard Lutnick.
As Thrasher notes, the imposition and enforcement of these penalties could result in a complete halt to U.S. coal exports for 60 days, jeopardizing $130 billion in shipments. In addition, these penalties could increase the market value of U.S. coal supplies by 35%, making them uncompetitive on the world market.
The proposed tariffs could also make it harder for U.S. exports of other energy products, such as oil, liquefied natural gas and fuel oil, the American Petroleum Institute said in a submission to the USTR.
More than 200 companies, trade groups and individuals have already submitted comments or requested to speak at the hearing, which will take place over two days in Washington this week. Nearly all groups oppose a proposal by the Office of the U.S. Trade Representative to impose millions of dollars in new tariffs every time a Chinese-made ship enters a U.S. port.
