USTR petition seeks to impose a port fee on Chinese-built ships docking in U.S. ports

Senator Tammy Baldwin: “Over the last two decades, China has tried to rig the system with unfair trade practices in the shipbuilding industry – hurting American workers, American shipbuilders, and our national security.”

U.S. Senators Tammy Baldwin (D.-Wis.) and Bob Casey (D.-Pa.) are throwing their weight behind a coalition of U.S. labor organizations led by the United Steelworkers union (USW) that has filed a Section 301 petition, calling on the United States Trade Representative (USTR) to initiate an investigation of Chinese commercial shipbuilding. The petition is for “for relief under Section 301 of the Trade Act of 1974, as amended” and calls for remedies that include levying a port fee on Chinese-built ships calling U.S. ports.

Today, President Joe Biden, promised that “USTR will take a hard look at the petition.”

The 137-page petition provides a detailed breakdown of the non-market practices used the Peoples Republic of China to build up its shipyards and dominate world shipbuilding as part of a wider plan to dominate world trade.

“The PRC is using commercial shipbuilding to dominate the full spectrum of global trade, choking out all competitors,” said USW International President David McCall. “If we do not act quickly, we will soon be dependent on China not only for the products their vessels bring into our ports but also for the ships themselves.”

The petition calls for action by the USTR that “should include the assessment of a port fee on Chinese-built ships that dock at a U.S. port, the creation of a Shipbuilding Revitalization Fund to help the domestic industry and its workers compete, and other measures to stimulate demand for, and the capacity to construct, commercial vessels built in the United States.”

“In order to address the burdens and restrictions on U.S. commerce that have resulted from China’s practices,” says the petition, “the fee should also be sufficient to eliminate some of the unfair advantage that Chinese-built ships enjoy in international maritime trade, and also sufficient to provide a robust funding stream for the U.S. Commercial Shipbuilding Revitalization Fund … “

“The fees collected from Chinese-built ships should be directed towards funding a U.S. Commercial Shipbuilding Revitalization Fund. The funds should be used to funnel resources into the Construction Differential Subsidy … “

Readers who were around at the time will recall that, under the Construction Differential Subsidy, which was in operation for almost half a century, the U.S. government paid U.S. shipyards and U.S, shipowners up to 50% of the difference between cost of building a vessel in the United States and the cost of construction outside of the United States.

The program was defunded in 1982, but the petition notes that “the CDS statute remains codified in U.S. law and it could be reinvigorated through port fees on Chinese-built ships channeled through a U.S. Commercial Shipbuilding Revitalization Fund.”

How likely is the petition to succeed? Senators Baldwin and Casey have written U.S. Trade Representative Ambassador Katherine Tai urging that she “expeditiously initiate a full Section 301 investigation and consider the relief measures identified in the petition to address the injury that the PRC’s policies and actions have had on our commercial shipbuilding, transportation, and logistics sector.“

“We have seen the PRC create dependencies and vulnerabilities in multiple sectors, like steel, aluminum, solar, batteries, and critical minerals, harming American workers and businesses and creating real risks for our supply chains,” said Ambassador. Katherine Tai on receiving the petition. “USTR and the Biden-Harris Administration are fighting every day to put working families first, rebuild American manufacturing, and strengthen our supply chains.

“I look forward to reviewing this petition in detail.”

• Download the full petition HERE