Pursuant to USTR’s Section 301 investigation that was completed in March, the United States on July 6 implemented a 25 percent tariff on goods from China totaling $34 billion in annual import value. This Thursday the U.S. will issue a second tranche of 25 percent tariffs on goods from China with an annual import value of $16 billion.
The USTR is holding hearings, which started Monday and end next Monday, to get comments on the proposed third tranche of Section 301 tariffs on goods from China totaling $200 billion in annual import value.
Although President Donald Trump initially wanted a 10 percent duty for the third tranche of tariffs, U.S. Trade Representative Robert Lighthizer said Aug. 1, “The president has directed that I consider increasing the proposed level of the additional duty from 10 percent to 25 percent.”
The USTR said this past Friday, “The proposed tariffs are a supplemental action in response to China’s unfair trade practices related to technology transfer, intellectual property and innovation.”
At $4.6 trillion a year, the value of cargo activities at America’s seaports is a significant driver of the U.S. economy, supporting over 23 million American jobs and generating more than $320 billion in federal, state and local taxes each year, according to AAPA, which pointed out that all but 1 percent of the nation’s overseas trade moves through its maritime facilities.
“Including the additional $200 billion proposed, the total Section 301 tariffs on Chinese commodities and China’s retaliatory responses, to date, would cover 8.4 percent of trade through America’s ports by value,” AAPA President and CEO Kurt Nagle’s prepared testimony says.
Nagle also will request that the multimillion dollar container cranes that U.S. ports have on order from Chinese factories, as well as cranes they are considering purchasing from these factories, be exempt from tariffs.
“Several U.S. ports have Chinese cranes on order, with a cost of up to $14 million per crane,” his prepared testimony says. “The 25 percent additional tariff would cost each of these ports millions of dollars and reduce U.S. ports’ competitiveness with Canadian and Mexican ports vying for U.S. cargo.
“Currently there is no U.S. manufacturer for these cranes, and in the case of low-profile cranes that are required for ports near airports, the only experienced manufacturer is from China,” he adds.
Additionally, he will request that USTR exempt cargo-handling yard equipment at ports that have Harmonized Tariff Schedule codes that are specifically referenced in the Section 301 tariffs expansion proposal.