The Trump administration has opened a broad new front in its global trade conflict, proposing to impose taxes reaching $ 1.5 million in ships made by Chinese coming to US ports.
Such tariffs would also be implemented on ships made elsewhere if they are operated by carriers whose fleets include Chinese ships – an approach that risks increasing costs in a group of imported loads, from raw materials to factory goods .
Given their potential to raise consumer prices, taxes can clash with President Trump’s promises to attack inflation. Nearly 80 percent of the US foreign trade is shipped by boat, but less than 2 percent is carried out on the US -flag ship, according to Wavenkal Research.
As detailed on Friday by the United States Trade Representative Office, the proposal reflects Credo “America First” that animates the Trump administration. It is created to discourage confidence in Chinese ships in supplying Americans with products, while aiming to promote the revival of a local shipbuilding industry after half a century of real drowsiness.
Together with Mr. Trump’s extensive tariffs, the approach to transportation is a rebuke of the trading system built by the United States and its allies after World War II. Belief in the world’s view as a sharp market has given way to hostility to globalization in favor of pursuing self-sufficiency.
The proposal would advance the mission to isolate China as it reduced the US confidence in its industry – a rare zone of the two -party consensus in Washington. The plan was the result of an investigation, launched during the administration of Biden, in the predominance of the Chinese transport industry, in response to a petition presented by work unions.
Almost one -fifth of the container ships arriving in US ports have been made in China, and much higher in trading lanes that include Pacific, according to Ing, the Dutch banking giant.
“A significant portion of imports entering the US through ports would directly undergo large penalties,” the bank scholars concluded in a report published on Monday. “These additional expenses are likely to be transferred from the carrier to the carriers and, ultimately, to the importer and exporters.”
The administration is commenting on the proposal until March 24th. Mr. Trump could impose taxes by executive order.
The plan envisions a series of shipping tariffs in US ports depending on the percentage of ships made by Chinese in a carrier’s fleet. In addition to the $ 1.5 million scale for Chinese -built ships, it depicts taxes reaching $ 1 million for calling for carriers whose orders for new ships attract much to Chinese transport yards.
The main carriers usually stop at two or three US ports by road, which means their taxes can exceed $ 3 million on trips bringing $ 10 million to $ 15 million in revenue, Ryan Petersen, Chef Executive of Flexport, estimated a global logistics company.
“The proposed tariffs are huge, and they will be included in what carriers have to pay, and so consumers,” Willy said, see an international trade expert at Harvard Business School. “It is a truly aggressive action that reflects an administration that is not in touch with the way the world really works or does not care about and wants to cause chaos.”
UPHEAVAL can suit Mr. Trump, who has sought to pressure companies to make their products in the United States. But increased transport costs can hinder that effort, given that more than a quarter of US imports are components, parts or raw materials, according to World Bank data. The highest costs for such a cargo challenge the economy of making goods ready in the United States.
Trump’s proposal aims to oppose the Chinese shipbuilding industry prevailing, which makes more than half of the world’s cargo shipping, from 5 percent in 1999, according to the United States Trade Representative Office.
At least 15 percent of US exports would have to be sent to the US flag to the US within seven years of new policy, and 5 percent of the fleets would have to be built in the United States.
“There is no physical way in the hell that American shipyards can do,” said Lars Jensen, the chief executive of Vespucci Maritime, a Copenhagen -based containers’ transport consultancy. “The technical term for this proposal would simply be ‘stupid’.”
The reception for a new vessel from an existing ship shipyard already extends more than three years, he said. An American industry would start almost from scratch, demanding billions of dollars and many years.
Attempting would also require steel – a commodity made more expensive than Mr. Trump’s fees.
Meanwhile, taxes would create fresh opportunities for shipyards located in South Korea and Japan.
If approved, the proposal will clash international transport, planting additional uncertainty for businesses that are already accumulating with Mr. Trump’s various tariff proposals.
Importers are most likely to reduce their use of US ports by sending to Mexico and Canada, and then using trucks and rail to hand over to the United States.
“These ports are often compressed,” noted Mr. Petersen, Chief Executive of Flexport. “They will not be able to absorb many capacities.”