News / 'Restoring America's maritime dominance' – stop laughing at the back of the class

ID 136026733 © Paulklee1879 | Dreamstime.com

The US government has pushed ahead with plans to revitalise its shipbuilding industry, after President Trump issued an executive order yesterday entitled “Restoring America’s Maritime Dominance”.

However, the threat of severe fees on Chinese-built ships calling at US ports, by the US Trade Representative under the 301 rule, has yet to materialise.

“The commercial shipbuilding capacity and maritime workforce of the United States has been weakened by decades of government neglect, leading to the decline of a once strong industrial base, while simultaneously empowering our adversaries and eroding United States national security,” says the order.

“Both our allies and our strategic competitors produce ships for a fraction of the cost needed in the United States.

“Rectifying these issues requires a comprehensive approach that includes securing consistent, predictable, and durable federal funding, making United States-flagged and -built vessels commercially competitive in international commerce, rebuilding America’s maritime manufacturing capabilities (the maritime industrial base), and expanding and strengthening the recruitment, training, and retention of the relevant workforce.”

The order will see a Maritime Action Plan (MAP) developed by the assistant to the president for national security affairs (APNSA) in cooperation with the State, Defense, Commerce, Labor, Transportation, and Homeland Security departments, as well as the USTR over the course of this year.

The order said the USTR would continue its 301 investigation following last month’s hearings from industry figures, and collect “additional information” to determine “appropriate steps to enforce any restriction, fee, penalty, or duty imposed”, indicating that the immediate threat of port fees on Chinese-built ships, of up to $1.5m per call at a US port, is in abeyance.

One US source told The Loadstar this week: “The carriers are still very scared about the USTR shipbuilding fees and the recent comments by US trade representative Jamieson Greer point to charges coming.

While that fear may have temporarily abated, the latest executive order added that the USTR’s investigation would now also include considering tariffs on Chinese-built port equipment, particularly “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 tariffs on other cargo handling equipment”.

It also included a proposal to apply the US harbour maintenance fee (HMF) – currently 0.125% of the value of the cargo shipped through US ports – on containerised imports arriving via Canadian and Mexican ports and over the land borders, through new legislation that would “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% service fee for additional costs to the CBP”.

It added that, over the next three months, it would try to convince US allies to adopt similar policies, while at the same time introducing “incentives to help shipbuilders domiciled in allied nations to undertake capital investment in the US to help strengthen the shipbuilding capacity of the United States”.

The proposals are set to be supported by the creation of a ‘Maritime Security Trust Fund’ as a “source to deliver consistent support for MAP programs”.

Much of this is likely to be used as incentives for capex in the US shipbuilding sector, but a substantial tranche will also be set aside to finance seafarer training programmes.