With Donald Trump widely tipped to pass judgement on extra fees for Chinese-linked tonnage calling at US ports in the next couple of days, another wrinkle has emerged that has not been widely discussed in Washington to date.
Trump’s tariff war against China late last week backtracked as his administration took on advice from the tech sector, who pointed out that global supply chains for the manufacturing of much tech, such as smartphones, inevitably involves some Chinese produced items. Consequently, Trump exempted smartphones, computers and some other electronic devices from reciprocal tariffs last weekend.
Similarly, the Trump administration might have to make concessions when it passes judgement on Chinese tonnage calling at US ports, as many Japanese and Korean yards subcontract much of their construction to China these days.
Following an investigation into Chinese shipbuilding practices, and with the aim of resuscitating American shipyards, the US Trade Representative has recommended a triple-pronged set of potential fees for Chinese-linked vessels that could have amounted to as much as $3.5m per US port call, something that drew nearly 400 responses, mostly negative, when a public hearing was held last month. Trump is expected to make his ruling on the investigation before the end of this week.
Appearing in front of a Senate Finance Committee last week, US Trade Representative Jamieson Greer said his organisation had taken onboard the huge volume of complaints registered during a public hearing into proposals to charge companies with Chinese tonnage on their books extra for port calls in the US.
“They’re not all going to be implemented. They’re not all going to be stacked,” Greer said last week.
Like the tech pullback, Washington might be forced to make concessions as so many shipyard alternatives – such as Tsuneishi and Kawasaki Heavy in Japan and Samsung Heavy Industries in South Korea – have extensive production facilities in China.
American deliberations on charging more for Chinese-linked tonnage has already seen a shift in ship buying preferences over the past month, both for newbuilds and in the secondhand market.
