WASHINGTON: Proposals by President Donald Trump's administration to revitalize US shipbuilding are facing pushback from businesses, with retailers warning Monday that added fees targeting Chinese-built vessels could bring higher costs and supply chain problems.
Shipbuilding has been in steady decline in the United States, with the world's biggest economy falling far behind its main rival, China.
Trump has promised to reverse this, vowing to “resurrect” the industry.
But a key proposal that some business groups oppose involves charging port entrance fees of up to $1.5 million for Chinese-built ships, among other remedies recently raised by the US Trade Representative's (USTR) office.
This week the office began two days of public hearings on proposed actions as it probes China’s targeting of the maritime and shipbuilding sector “for dominance.”
“Imports and exports would decline as a result of the higher costs of the fees, and/or the mandate to use more expensive US-built, US-operated ships,“ said a joint letter by two US retail associations to USTR Jamieson Greer.
While the shipbuilding sector “might see small gains over time,“ costs to other sectors and the broader economy would be greater, argued the National Retail Federation (NRF) and Retail Industry Leaders Association (RILA).
Both groups had commissioned a study alongside 30 other organizations in different industries to examine the ramifications of the USTR's proposals, which also include export restrictions.
They said that as higher costs filter through the economy, sectors could see declines in sales and employment too.
Retailers are also concerned that carriers may seek to avoid fees by cutting out smaller ports and overwhelming bigger ones, adding to congestion and other supply chain challenges.
One business expressed worry that proposed fees, alongside tariffs on China and other countries, as well as duties on steel and aluminum imports, would put “extraordinary pressure on US retailers.”
Proposed fees could nearly double the cost to import certain items, the retailer added, according to the NRF and RILA.
But other industry groups expressed support for the USTR's proposed relief measures.
Alliance for American Manufacturing president Scott Paul cited the need for “decisive action” to rebuild strategically significant sectors.
He urged the USTR to direct funds from its proposed docking fee towards “building American shipbuilding capacity” and related efforts.
Union representatives who testified Monday made similar calls.
Brian Bryant of the International Association of Machinists and Aerospace Workers said swift imposition of relief measures is “critical to the long-term health of the domestic shipbuilding industry.”
The China Association of the National Shipbuilding Industry expressed opposition against singling out China's shipping sector.
