US Shipping Industry Battles Trump-Era Levies on China-Linked Vessels

A heated debate over a Trump administration proposal to impose hefty fees on China-linked ships docking in the US played out at a US Trade Representative hearing on Monday, as reported by Bloomberg. The proposed levies, carrying million-dollar price tags, have sparked fierce opposition from shipping companies and agricultural exporters while garnering support from labor unions and steel manufacturers.

The hearing, featuring over 30 witness statements, highlighted the stark divide over the proposed measure, which aims to address China's dominance in the shipbuilding industry. While there was widespread agreement that China's influence needs to be addressed, concerns linger about the potential negative consequences of the levies.

Ocean carriers and agricultural exporters expressed deep apprehension, warning that the fees would disrupt global supply chains and cripple entire sectors of the US economy.

Joe Kramek, CEO of the World Shipping Council, urged the USTR to abandon the fees, arguing that "order backlogs, especially from the military, and labor shortages constrain the ability of US shipyards to take on additional orders."

Mike Koehne, representing the American Soybean Association, emphasized the already challenging environment for agriculture, asserting that the levies would force farmers to shoulder higher costs for essential inputs like fertilizer and seed, putting US producers at a competitive disadvantage.

"Our competitors in Brazil and Argentina will not be subject to the same regulations," Koehne stated in a written statement. "While well-intended, this proposal would ensure US soybeans will bear higher costs and be less competitive in the global marketplace."

In contrast, labor representatives voiced strong support for the levies, emphasizing the need for reinvestment in the struggling US shipbuilding sector.

US Representative Chris Deluzio, a Pennsylvania Democrat, highlighted the loss of jobs to overseas companies and expressed his commitment to bolstering the shipbuilding industry to enhance capacity and create new jobs.

"USTR remedies are a step in the right direction," Deluzio stated.

Congresswoman Debbie Dingell underscored the significant decline in US shipyard jobs over recent decades, noting that the US currently ranks 19th globally in shipbuilding.

"The US produces less than 10 oceanic commercial vessels a year, while China produces over 1,000," Dingell pointed out. She also expressed support for another aspect of the Trump proposal, which would gradually increase the requirement for US goods to be shipped on US-flagged, built, and crewed vessels.

Steel industry representatives also threw their weight behind the proposal, citing their readiness to expand capacity to meet the increased demand for steel and components needed for new ship construction.

Patrick Bloom, executive vice president of steelmaker Cleveland-Cliffs Inc., asserted that his company was poised to double or even triple its capacity if necessary, emphasizing that "actions of this magnitude" are essential to compete with China.