Proposed U.S. fees targeting Chinese-made ships are raising concerns among trade and logistics experts, who warn of potential disruptions to global supply chains and negative repercussions for the American economy.
This week, the Office of the United States Trade Representative (USTR) is holding public hearings for stakeholders to weigh in on the Trump administration's proposal which could impose fees of up to 1.5 million U.S. dollars on Chinese-linked vessels docking at U.S. ports.
Approximately 90 percent of all U.S. imports come through seaports. A majority of the vessels are either constructed, owned, or operated by China.
Experts fear the added costs could force shipping companies to turn to cost-saving efforts by limiting their stops to major U.S. seaports, like Los Angeles.
That could have major consequences for exporters in rural areas.
"For a grower in the Central Valley to have to spend another 500 to 1,000 U.S. dollars to truck their cargo down to Los Angeles or Long Beach, get on a vessel and move out to Asia, maybe the price for that product, think of a walnut handler as an example, gets too high on a per unit basis and suddenly they're competing with other growing nations," said Gene Soroka, executive director of the Port of Los Angeles.
Weston Labar, chief strategy officer of Waterfront Logistics, stressed that efforts to rebuild the sort of large-scale production capabilities necessary to produce ships in the U.S. would rely on far more than proposed protections.
"I think there's a strong likelihood that something could come to fruition. My hope is that attached with it is a common sense time frame on how we have the right type of workforce and the right type of supporting industries like steel and others to support shipbuilding in the United States, as opposed to just saying, we're going to start charging fees on Chinese built ships because there's no alternative right now. As admirable as the end goal is, if it's not done the right way, it could have catastrophic impacts to our global supply chain and really to the American consumer base," said Labar.
Last month, the USTR office announced that it is seeking public comment on proposed actions in the Section 301 investigation into China's maritime, logistics and shipbuilding sectors, including the imposition of port fees.
The Chinese commerce ministry said the U.S. Section 301 investigation is a typical act of unilateralism and protectionism which seriously violates World Trade Organization rules and warned that the U.S. proposal to levy port fees on Chinese ships could backfire.
Experts warn of global trade fallout as U.S. proposes port fees on Chinese-linked ships
Experts warn of global trade fallout as U.S. proposes port fees on Chinese-linked ships
Experts warn of global trade fallout as U.S. proposes port fees on Chinese-linked ships
