Trump Takes Aim at Chinese Shipping Amid Widening Trade War

[Pelican Press 0]

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Trump Takes Aim at ******** Shipping Amid Widening Trade War

The Trump administration has opened a broad new front in its global trade conflict, proposing to affix levies reaching $1.5 million on ********-made ships arriving at American ports.

Such fees would apply even on vessels made elsewhere if they are operated by carriers whose fleets include ******** ships — an approach that risks increasing costs on an array of imported cargo, from raw materials to factory goods.

Given their potential to increase consumer prices, the levies could collide with President Trump’s promises to attack inflation. Nearly 80 percent of American foreign trade by weight is transported by ship, yet less than 2 percent is carried on American-flagged vessels, according to Gavekal Research.

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by the Office of the United States Trade Representative, the proposal reflects the “America First” credo animating the Trump administration. It is engineered to discourage reliance on ******** vessels in supplying Americans with products, while aiming to spur the revival of a domestic shipbuilding industry after a half-century of veritable dormancy.

Taken together with Mr. Trump’s expansive tariffs, the approach to shipping is a rebuke of the trading system constructed by the United States and its allies after World War II. Faith in the view of the world as a teeming marketplace has given way to hostility toward globalization in favor of the pursuit of self-sufficiency.

The proposal would advance the mission to isolate China while diminishing American reliance on its industry — a rare area of bipartisan consensus in Washington. The plan was the result of an

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, started during the Biden administration, into the dominance of the ******** shipping industry, in response to a

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filed by labor unions.

Almost one-fifth of container vessels arriving at American ports are made in China, and a far higher share on trading lanes spanning the Pacific, according to ING, the Dutch banking giant.

“A significant portion of imports entering the U.S. via ports would be directly subject to hefty fines,” the bank’s researchers concluded in a

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published Monday. “These additional expenses would likely be passed on from the carrier to shippers and, ultimately, to importers and exporters.”

The administration is fielding comments on the proposal through March 24. Mr. Trump could then impose the levies by executive order.

The plan envisions a range of fees on ships unloading at American ports depending on the percentage of ********-made vessels in a carrier’s fleet. In addition to the rate of up to $1.5 million for ********-built ships, it outlines levies reaching $1 million per port call for carriers whose orders for new ships draw heavily on ******** shipping yards.

Major carriers typically stop at two or three American ports per route, meaning their levies could exceed $3 million on journeys bringing $10 million to $15 million in revenue, estimated Ryan Petersen, chef executive of Flexport, a global logistics company.

“The proposed fees are huge, and they will get rolled into what shippers have to pay, and hence consumers,” said ****** Shih, an international trade expert at Harvard Business School. “It’s a really aggressive move that reflects an administration that is either out of touch with how the world really works or that doesn’t care and wants to cause chaos.”

Upheaval may suit the designs of Mr. Trump, who has sought to pressure companies to make their products in the United States. But increased shipping costs could hamper that effort, given that more than one-fourth of American imports are components, parts or raw materials, according to

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. Higher costs on such cargo challenge the economics of making finished goods in the United States.

The Trump proposal aims to counter the dominance of the ******** shipbuilding industry, which makes more than half the world’s commercial cargo vessels, up from 5 percent in 1999, according to the Office of the United States Trade Representative.

At least 15 percent of American exports would have to be shipped on U.S.-flagged vessels within seven years of the new policy, and 5 percent of fleets would have to be built in the United States.

“There is no physical way in hell that U.S. shipyards can do that,” said Lars Jensen, chief executive of Vespucci Maritime, a container shipping consultancy based in Copenhagen. “The technical term for this proposal would just be ‘stupid.’”

The wait for a new container ship from an existing shipyard already stretches more than three years, he said. An American industry would be starting almost from scratch, requiring billions of dollars and many years.

The effort would also require steel — a commodity made more expensive by Mr. Trump’s tariffs.

In the meantime, the levies would create fresh opportunities for established shipyards in South Korea and Japan.

If enacted, the proposal would scramble international transportation, sowing extra uncertainty for businesses already grappling with Mr. Trump’s various tariff proposals.

Importers would most likely reduce their use of American ports by shipping into Mexico and Canada, and then using trucks and rail to deliver to the United States.

“Those ports are often congested,” noted Mr. Petersen, the Flexport chief executive. “They won’t be able to absorb much capacity.”

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