Trump Prepares Another Blow to Global Trade

Donald Trump is reportedly preparing to introduce a new tax on foreign trading vessels entering U.S. ports, aiming to "revive American shipbuilding," which has struggled against competition from Chinese shipyards. This information comes from a BBC report.

The U.S. administration plans to announce new regulations before the Easter holidays. The objectives of these measures include limiting China's maritime dominance and incentivizing the shipping fleet to place orders with American shipyards, while also aiming to generate additional revenue for the U.S. budget.

According to the broadcasting corporation, this time the administration intends to consult with business representatives prior to implementing new measures, hoping to avoid a repeat of the import tariffs that were swiftly rescinded. However, shipowners and carriers express skepticism about the feasibility of these plans. They argue that Chinese ships will remain prevalent, and that American shipyards are only producing a couple of vessels per year due to a lack of technology, skilled labor, and mariners.

Trump asserted that U.S. security is at risk due to the decline of American shipyards, noting a scarcity of American sailors in the country. In his April 10 directive, he pointed out that "both our allies and strategic rivals are building ships at a fraction of the cost that the United States incurs." He aims to restore shipbuilding and the maritime sector as a whole "for national security and economic prosperity."

China is characterized as a strategic rival, as it builds 74% of the world's vessels, with the U.S. accounting for only 0.2%. China produces 96% of containers, which make up two-thirds of all maritime shipping, responsible for 90% of global goods trade. The data from the White House indicate that the United States holds a mere 0% share in the container market.

To remedy this situation, a proposal has been drafted to impose fees on vessels entering U.S. ports, targeting all entities associated with China. This includes not only Chinese carriers but also any shipping companies whose fleets contain Chinese vessels or who place orders with Chinese shipyards. Shipowners estimate that these fees could exceed $3 million per unloading at ports, warning that Trump is tilting at windmills. They argue that the U.S. cannot prevail over China at sea, and the prohibitions will ultimately harm America more than anyone else.

According to Bimco, the leading industry group, "American shipbuilding has long been uncompetitive." They further state that the export of liquefied gas, which Trump is counting on for his energy strategy, is entirely unfeasible since there is not a single liquefied gas carrier under an American flag built in the United States, nor any orders for such vessels.

Bimco also critiques another initiative that would require shipping companies to transport at least 20% of American exports on vessels built in the U.S. under the U.S. flag, labeling it as completely untenable.

The BBC article suggests that following criticism of the initial proposals, the White House is considering modifications. However, carriers remain unconvinced that America will essentially close its ports to the global shipping fleet.