As Donald Trump unleashes another salvo of tariffs, this time a 25% levy on all cars imported to the US, his policy on shipping is encountering criticism even within the US.
The Office US Trade Representative held two hearings earlier in the week to assess the views within the US on the proposals to impose tariffs on Chinese built ships and Chinese shipping lines entering American ports. Reaction to the proposals was mixed. Retailers in particular were critical of the proposals. The National Retail Federation and the Retail Industry Leaders Association submitted a vigorous joint response to the hearing, with a report commissioned by the two organisations asserting that it expected “imports and exports [to] decline as a result of the higher costs of the fees, and/or the mandate to use more expensive U.S.-built, U.S.-owned and U.S.-operated ships. While the potential negative impacts on U.S. agriculture are ‘headline-grabbing,’ those negative impacts extend as well to other sectors of the American economy, including retail. As higher costs filter through the economy, the wholesale and retail trade sectors, from stores to restaurants, see declines in sales and employment”.
In contrast the ‘Alliance For American Manufacturing’ supported the proposals as “these remedies will help to restore American economic security, push back against China’s unfair trade practices, and revitalize shipbuilding in America”, whilst the United Steel Workers Union said that “it commends the Administration on its proposed remedies announced as a result of this investigation. We strongly support USTR’s findings that the PRC’s acts, policies, and practices are actionable under Section 301, and it is necessary to impose sufficient remedies sufficient to counter the CCP’s vast industrial and trade policies that continue to restrict U.S. commerce in the logistics, maritime and shipbuilding sectors”.
Although opposition to the specific levies on Chinese shipping is wide and vocal, covering much of the logistics sector in the US as well as the exporters such as agricultural producers, there is also substantial support for these and other tariffs. It would be dangerous to dismiss this support as it often comes from representatives of important political constituencies in the US. Additionally, their arguments around Chinese subsidies to its ship building sector are not incoherent.
Author: Thomas Cullen
Source: Ti Insight
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