Port authorities and ocean carrier trade groups are voicing “serious concerns” regarding a new array of fees assessed on certain maritime vessels and cargo handling equipment announced Thursday by the Trump Administration’s U.S. Trade Representative (USTR), cautioning that the measures could undermine American trade, hurt U.S. producers, and weaken efforts to strengthen the nation’s maritime industry.
The fees will be levied under Section 301 of the Trade Act of 1974, a law that is designed to address unfair foreign practices affecting U.S. commerce. “Ships and shipping are vital to American economic security and the free flow of commerce,” said U.S. Trade Representative Ambassador Jamieson Greer. “The Trump administration’s actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.”
But while companies and trade groups operating in that sector may endorse some of those goals, their statements this week show that they disagree with the White House strategy to achieve them. The latest resistance to the new fees echoes earlier statements from other companies that have also pushed back against the White House’s strategy to jumpstart the domestic shipbuilding sector by penalizing ocean carriers that use Chinese-built ships.
Most recently, the American Association of Port Authorities (AAPA) on Friday also lined up to oppose that approach, saying it opposed the USTR’s final action to a Section 301 Investigation that would impose fees on Chinese vessels and new tariffs on cargo-handling equipment (CHE). “America’s ports appreciate the Trump Administration’s willingness to incorporate industry’s concerns in their efforts to counter China’s dominance in the maritime space,” Cary S. Davis, AAPA President and CEO, said in a release. “This policy will, however, still drive up the cost of shipping, reduce volume through our nation’s trade gateways, and make goods, especially automobiles, more expensive everyday American consumers.”
The AAPA calculated the potential cost of the policy as reaching almost $1 million per vessel, based on the USTR remedy of a fee on foreign-built vehicle carriers of $150 for every car the ship has capacity to carry. That rate would add up quickly for a typical roll-on-roll off auto carrier that holds some 6,000 cars. Similarly, the potential for an additional 100% tax on cargo handling equipment (CHE) would bring that tariff as high as 270% on ship-to-shore cranes. That would represent an unaffordable situation for U.S. facilities that have no alternative sources to turn to.
“The Administration must remember that there are currently no domestic manufacturers of ship-to-shore cranes,” Cary said. “Without action from the Administration to create an incentive for their production, there won’t be for several years. High tariffs on ship-to-shore cranes, without affordable alternatives from either domestic or allied sources, function as a crippling tax on port development and seriously threaten our nation’s ability to expand cargo movement.”
The World Shipping Council (WSC) has a similar stance, according to a statement from WSC President and CEO Joe Kramek. “Revitalizing America’s maritime sector is an important and widely shared goal — one that requires a long-term, legislative and industrial strategy. We welcomed the vision outlined in the President’s Executive Order, which proposes targeted initiatives to strengthen U.S. shipbuilding, ports, and supply chain resilience,” Kramek said. “Unfortunately, the fee regime announced by USTR is a step in the wrong direction as it will raise prices for consumers, weaken U.S. trade and do little to revitalize the U.S. maritime industry.”
The WSC’s statement said it was “urging the Administration to reconsider this counterproductive measure” and reaffirmed its commitment to working collaboratively with the Administration and industry stakeholders on solutions that can truly strengthen the U.S. maritime sector.
Specifically, more constructive pathways to reaching those shared goals could include policies like targeted investment incentives, infrastructure improvements, and streamlined regulatory processes, the group said. Those steps can deliver lasting benefits without disrupting U.S. trade or raising costs for American producers and consumers, according to the WSC.
And in a similar statement, the American Apparel & Footwear Association (AAFA) is warning that the USTR move to implement steep new taxes on ships calling on U.S. ports would have “serious consequences” such as harming U.S. farmers, workers, and the broader economy.
In addition to new fees targeting Chinese vessel operators, Chinese vessel owners, and Chinese built vessels, the USTR has also proposed additional tariffs ranging from 20% to 100% on equipment crucial to transportation networks: containers, chassis, and ship-to-shore cranes. In AAFA’s view, those fees and tariffs will reduce U.S. trade, resulting in losses for American businesses and further raising costs for American consumers. “We fully support strengthening the U.S. maritime industry, but penalizing shippers for not using American-flagged or built vessels, when they cost up to five times more and remain in limited supply, is counterproductive,” Nate Herman, AAFA Senior Vice President of Policy, said in a release. “It is telling that the administration made this announcement after markets closed today, and when the markets won’t open again until Monday, masking a decision that is bad for the economy – bad for American farmers, bad for American manufacturers, bad for American businesses, and bad for hardworking American families.”
Editor’s note:This article was revised on April 21 to add input from AAFA.
