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US ports are worried about the impact of the extra tariffs Washington will slap on imports from China on September 1.
They are particularly concerned about how it will affect the cost of ship-to-shore cranes and argue that this would impact other necessary infrastructure investments.
Short of a settlement of the US-China trade stand-off, they are calling on the administration to exempt gantry cranes from the tariff list of products due to be hit with a 10% levy next month.
The Association of American Port Authorities (AAPA) has led a chorus of opposition from the marine side to the latest round of tariffs.
“AAPA is very concerned about the president’s renewed threat to increase tariffs on Chinese goods, and the expected retaliation by the Chinese government,” said Susan Monteverde, the organisation’s vice-president of government relations.
“Among the biggest ticket items on the tariffs list are multi-million-dollar ship-to-shore gantry cranes used by American ports to load and unload containers from today’s giant cargo ships. The president has the authority to de-list these cranes from the tariffs schedule and we urge him to do it.”
Adding a double-digit tariff to the cost of these cranes would affect ports’ ability to finance necessary expansion and upgrade projects, argues AAPA. They would be left with the choice of either not pursuing these projects or delaying other elements.
AAPA president and CEO Kurt Nagle raised these points at a panel organised held by the Office of the US Trade Representative on June 21, which discussed the ramifications of a 25% tariff plan by the White House. His comments were backed up by executives from several major US ports.
Griff Lynch, executive director of Georgia Ports Authority, said a 25% tariff would have a “substantially negative impact” on expansion work at the port of Savannah. The port is getting six large gantry cranes with a price tag of $70m.
Port Everglades has three ship-to-shore cranes on order, at $13.8m each, due for delivery next spring, part of a $437.9m expansion project. A 25% duty would leave the project $10.3m short, the port warned.
And the port of Charleston estimates that a 25% tariff on gantry cranes would push up the cost of its planned expansion by $36m.
The port of Virginia ordered two ship-to-shore cranes in May as part of its massive expansion project. According to CEO and executive director John Reinhard, the cranes are a key element of the expansion and sees no alternative to ordering them from China, arguing that there are no viable alternatives.
Executives from New Orleans have pointed out that the type of new ship-to-shore crane the port is bringing in is not manufactured in the US and are essential for their plans, which are threatened by the tariffs.
The ports’ plight has drawn support from the political establishment. In June, two Republican senators from Georgia urged US trade representative Robert Lighthizer to remove ship-to-shore cranes from the looming tariff list. De-listing these from the tariff schedule “would allow our ports to continue with important infrastructure upgrades and will prevent major disruptions to trade in the south-eastern United States”, they said.
Intense lobbying succeeded a year ago when gantry cranes were on a list of items to be hit with a tariff by Washington and they were struck off the list.
However, for AAPA this would be only a partial success. The organisation wants an agreement with China that results in the elimination of all tariffs and has also voiced support for the nationwide Tariffs Hurt the Heartland campaign.
But in the present mood, this is not likely to find much resonance in the White House.