Big Boats, Big Bucks in New Trade Policy

A new proposal from The Office of the U.S. Trade Representative suggests hefty fees for Chinese cargo ships doing business at American ports.

FYI: These changes could have a costly impact on ag export routes.

Charting a course: Prompted by a petition from 5 labor unions, USTR released a comprehensive report on China’s acts/policies/practices shortly before President Trump took office. 

Their investigation found that China’s overwhelming dominance restricts the U.S. shipbuilding industry and “undermines fair and competitive markets, both domestically and internationally.”

(We’re just a little jealous that China controls over 50% of global market shares in the maritime, logistics, and shipbuilding sector.)

Pay or weigh anchor: The most daunting proposal is a surcharge of up to $1.5M for Chinese-built vessels and up to $1M for China-based vessels. 

We fight fire with fire. Or rather, restriction with restriction. Go team!

Ag reacts: Peter Friedmann, executive director of the Agriculture Transportation Coalition, said, “Transportation is really the key element of whether U.S. agriculture remains competitive with other emerging sources.”

To avoid extra transportation costs on the coast, agricultural exporters will likely redirect shipments through Canada or Mexico, where ships of all shapes, sizes, and countries of origin can carry commodities overseas.

What’s in store: USTR will hold a hearing on fees/shipping restrictions on March 24. Until then, the price of shipping ag exports over open oceans is unclear.