U.S. ports are pushing back on a new round of proposed tariffs against Chinese goods, amid concerns that tariffs will jeopardize U.S. jobs and will harm U.S. ports’ competitiveness.
“We’ve seen standoffs in international commerce before, and there’s still time to resolve differences, but recent tit-for-tat measures aimed at imports and exports could cause long-term damage and harm American consumers and businesses,” said Mario Cordero, executive director of the Port of Long Beach.
President Trump has historically railed against the “unfair trade” relationship between the U.S. and China and Washington has already imposed two waves of tariffs under Section 301 of the Trade Act of 1974 against Chinese imports. The first wave took effect in July when $34 billion of Chinese goods were hit with a 25 percent tariff, and $16 billion of Chinese goods were hit with a subsequent 25 percent tariff in August.
Meanwhile, the third round being considered would slap a 25 percent tariff on $200 billion of Chinese imports. China has already approved retaliatory tariffs in response to the first two rounds, and has threatened to impose additional tariffs on $60 billion of U.S. imports in response to the third.
The tariffs have generated concern among U.S. ports, which fear economic repercussions. Seaport cargo activity comprises more than 25 percent of the U.S. economy, and more than 23 million American jobs are connected to moving the cargo, according to the American Association of Port Authorities. The association represents more than 130 public port authorities in the U.S., Canada, the Caribbean and Latin America.
“Anything like a tariff that would drive up the cost of imported items and therefore might discourage consumption of those items, will result in a decline in the volume of trade and a decline in the volume of containers coming into U.S. ports,” said Jock O’Connell, an international trade adviser with Beacon Economics. “You’ll see less work for dock workers, for truck drivers, for people who work in the distribution centers.”
In August, association CEO Kurt Nagle urged the U.S. Trade Representative Office during hearings on the proposed tariffs to weigh “the negative impacts they would have on port and other trade related American jobs nationwide, including the effects of likely retaliatory responses.”
AAPA is also worried that the tariffs would drive up the costs of certain port infrastructure investments such as new, larger cranes to accommodate the bigger ships that have infiltrated the industry.
“It’s always been anticipated that the size of these vessels would continue to grow, but they have grown bigger and faster than pretty much anyone had anticipated would be the case,” Nagle told the Washington Examiner.
“With that increasing vessel size, many ports throughout the world are needing to upgrade their infrastructure to accommodate the larger volumes that are coming in on individual vessels,” Nagle added.
But the proposed tariffs could mean the cranes, which cost up to $14 million each and are not manufactured in the U.S., would cost millions more due to the tariffs on the metal. Higher price tags for port infrastructure could threaten U.S. ports’ ability to remain competitive with other ports, particularly those in Mexico and Canada, AAPA argues.
As a result, the association has requested a tariff exemption for cranes that U.S. ports have already purchased or are considering purchasing.
“We encourage policies and steps that certainly look toward efforts to increase U.S. competitiveness and therefore would expand U.S. exports as opposed to things that would put increasing restrictions on U.S. imports,” Nagle said.
Nagle said AAPA had not gotten “any indication one way or another” whether the cranes will receive an exemption as requested, but he remains optimistic.
“We honestly don’t know,” Nagle said about whether cranes will be exempt. “We’re certainly very hopeful that they will.”
Nagle said that AAPA has spoken to members of the administration and others beyond the U.S. Trade Representative that influence trade policy, and transportation and infrastructure policy, and will continue to do so.
“We will continue to make our perspective — particularly as it relates to the cranes — known,” Nagle said.
However, Nagle admitted it is too early to determine what the next actions would be for AAPA, following the association’s testimony in August before the U.S. trade representative.
The U.S. Trade Representative said in June that the tariffs are intended to “uphold fair trade and protect American competitiveness.” The U.S. Trade Representative did not provide additional comment to the Washington Examiner, and instead referred to past comments on the tariffs.
But experts say it is uncertain what the Trump administration’s goal is related to the tariffs, and do not expect that Trump will retreat from his position soon.
“Nothing is clear as to how we get ourselves out of this fix,” O’Connell said. “Neither Donald Trump, nor President Xi in China are of a temperament to back down. Trump is going to push this thing as far as he can.”
While Christine McDaniel, a senior research fellow at the Mercatus Center, said it was too early to determine the impact of the tariffs already imposed, she also said the administration’s tariff vision was unclear.
“Where is all of this heading? Because I think some people are willing to hold out and wait, take a little bit of pain,” McDaniel said. “But it would be a lot easier to do that if they knew that there was a real long-term game plan here. That has really yet to be revealed.”
McDaniel and O’Connell said working alongside other countries to address grievances against China’s trade policies would be the best strategy for the U.S., rather than continuing a tariff dispute.
“I really like that idea of us teaming up with like-minded countries … and reining in China that way,” McDaniel said. “I think that is much more effective than a bilateral tariff war.”
