Shipbuilding EO Silent on Ship Fees, US-Ship Requirements for Exports; Cranes to Be Tariffed
The decline of U.S. commercial shipbuilding -- and the fact that it's not cost-competitive with Japanese and South Korean shipbuilding -- must be rectified, the administration said, but the precise details of how that can be accomplished are yet to be determined.
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An executive order the president signed said whatever actions the U.S. trade representative determines to take as a result of its Section 301 action on Chinese maritime, shipbuilding and logistics industrial policy will await the collection of additional information from appropriate agencies, and must be coordinated with DHS and DOJ on enforcing "any restriction, fee, penalty, or duty imposed...."
The EO, which wasn't yet posted online by press time, said USTR "shall also consider taking all necessary steps permitted by law to propose the following actions:
(i) tariffs on ship-to-shore cranes manufactured, assembled, or made using components of PRC origin, or manufactured anywhere in the world by a company owned, controlled, or substantially influenced by a PRC national; and
(ii) tariffs on other cargo handling equipment."
The April 9 EO also says that in order to prevent cargo carriers from avoiding paying the Harbor Maintenance Fee (HMF) by bringing imports destined for the U.S. to Canadian and Mexican ocean ports, "the Secretary of Homeland Security shall take all necessary steps, including proposing new legislation, as permitted by law to:
(a) require all foreign-origin cargo arriving by vessel to clear the Customs and Border Protection (CBP) entry process at a United States port of entry for security and collection of all applicable duties, customs, taxes, fees, interest, and other charges; and
(b) ensure any foreign-origin cargo first arriving by vessel to North America clearing the CBP process at an inland location from the country of land transit (Canada or Mexico) is assessed applicable customs, duties, taxes, fees (including the HMF), interest, and other charges plus a 10 percent service fee for additional costs to the CBP, so long as the cargo being shipped into the United States is not substantially transformed from its condition at the time of arrival into the country of land transit (with the discretion for such decisions to be determined by CBP)."
The EO said that USTR, and Commerce and State departments officials should engage with allies and partners on both the Section 301 actions and the HMF collection at land borders.
The order calls for a legislative proposal to establish a Maritime Security Trust Fund, which might draw on "new or existing tariff revenue, fines, fees, or tax revenue." The U.S. used to have commercial shipbuilding subsidies that aimed to make U.S. production cost-competitive with other countries' production, up to a 50% differential, but they ended in 1981.
It says that within 90 days, the commerce secretary, in consultation with National Economic Council Director Kevin Hassett, will recommend "all available incentives to help shipbuilders domiciled in allied nations partner to undertake capital investment in the United States to help strengthen the shipbuilding capacity of the United States."