Comments Criticize 100% Ship-to-Shore Crane Tariff

"We again respectfully remind the Federal Government that there are currently no American producers of STS cranes, and outside of China, there are only three companies that make STS cranes available for international purchase. One is in Asia (Mitsui), and two are in Europe (Konecranes and Liebherr). Mitsui, Konecranes, and Liebherr do not have the production capacity to replace ZMPC’s market share. Raising tariffs on Chinese cranes another 100% will not magically revitalize an American crane manufacturing industry that has been nonexistent for decades," the group said in a comment on USTR's proposed Section 301 actions in the maritime industry. ZMPC refers to Shanghai Zhenhua Heavy Industries Company.

South Korean firms do also sell ship-to-shore cranes, building them in Vietnam and Korea; but any of these foreign firms do source components from China, which could cause their cranes to be subject to the tariffs.

In 2024, Paceco, which produced its last ship-to-shore crane in 1989, said it would be bringing crane assembly back to California in a partnership with Canada's Brookfield. However, it has not posted any news since then on the project, which was spurred by infrastructure act funding and concerns over cyber vulnerabilities with ZMPC cranes. Paceco and its Japanese parent company did not submit a comment.

AAPA wrote that it's hearing from its member ports "that non-Chinese STS crane manufacturers are already raising their prices now that tariffs on China are coming into effect."

The National Customs Brokers & Forwarders Association of America said that 25% tariffs on steel raises costs to make ship-to-shore cranes in the U.S. The group said it's concerned that even maintenance on existing cranes could be delayed with the tariff costs. "Simply sourcing critical spare parts such as electronic systems, ropes, wheels and trollies can take on average 90 to 180 days to receive from China -- the largest manufacturing source for STS cranes, components and parts," the group wrote.

NCBFAA said that a decade ago, a new ship-to-shore crane cost $10 million to $12 million, and now it's between $50 million and $60 million.

Chinese cranes, which have 80% of the market, are already covered by a 25% Section 301 tariff and 30% emergency tariffs.

The American Apparel and Footwear Association said that, given that China produces more than 70% of the world's ship-to-shore cranes, 95% of shipping containers and 86% of intermodal chassis, hiking tariffs on any of those goods will raise shipping costs, given there isn't sufficient competition from other producers.

"Many companies have already increased prices in response to existing tariffs and cannot absorb further cost burdens. We strongly urge you not to raise the duty rates on the proposed products," AAFA wrote.

The Retail Industry Leaders Association noted language in the proposal that said the 100% tariffs on cranes would apply to cranes assembled outside China, if that company is owned or controlled by Chinese nationals, and to cranes assembled anywhere if any of these parts are Chinese: the main boom, the trolley, the spreader, the cabin, the legs, the cable reel, the power supply, the bogie set and wheels, and any IT equipment.

"We have serious concerns about this novel approach for determining country-of-origin because of the precedent-setting nature it could have on future tariff actions and negotiations with trading partners. While USTR’s proposed action appears in keeping with the Executive Order, that same Order does not appear to require that USTR adopt such a restrictive and complicated test for country-of-origin purposes, and we urge it not to do so," RILA wrote.

The United Steelworkers supported the action, due to the surveillance and other security risks.

The state-owned ZPMC submitted a comment extensively quoting and citing port operators' comments about how increasing the price of cranes will make ports slower to buy new equipment, and will slow down operations. At a 25% tariff, there would be $131 million in duties owed on the 35 cranes already ordered by last year, it said, assuming an average price of $15 million a crane.

It also denied reports that ZPMC cranes are security threats, saying that government experts from the FBI and Coast Guard examine cranes before they go into service, and saying ZPMC cannot track traffic, origin or destination, as it has no remote access to its cranes. "The allegations that the STS cranes pose a cybersecurity or national security risk to any ports are based entirely on conjecture that is unsupported by any facts and contradicted by the observations of the U.S. port customers as well as the findings of the [U.S. Maritime Administration] report," the company wrote. It said ZPMC's cranes' operating systems are made by Toshiba Mitsubishi Electric Industrial Systems Corp. of Japan.

In addition to comments about cranes, trade groups responded to updates to the port fees action. AAPA thanked USTR for reducing the impact of the fees, but noted many of its changes -- such as not charging for each port of call, and charging by capacity -- aren't fully fleshed out. For instance, AAPA asked, what if a ship stops in Seattle, and then in Alaska, is that still considered a domestic string of stops? And, on capacity, do 20-foot TEUs count the same as 40-foot containers?

AAPA said the addition of fees on vehicle carriers, as written, does not target China; it applies to all foreign vehicle carriers.

The group said this will act as a tax on exported cars, since the ships that bring cars from Germany then pick up cars made in the U.S. to bring them back to Germany.

"One AAPA member port shared that, based on their calculations, this action would result in the collection of $27 million in fees on vehicle carriers at their port alone each year. That sum is roughly half the annual revenue of that port for all cargo types and cruise business," AAPA wrote. "No business can operate successfully with such a high tax burden from the government."