Trump-administration proposed port fees on Chinese-made maritime shipping vessels would hurt the United States economy, particularly its island state and territories, politicians and observers say.
The administration is proposing fees as high as $1.5 million per port entry on Chinese-manufactured ships involved in imports or exports, plus shipping companies with a substantial portion of their ships manufactured in China would also face fees up to $1 million for every port visit. If the proposal goes forward, each port visit for these vessels could incur fees as high as $3.5 million.
U.S. Virgin Islands Delegate Stacey Plaskett said she was "deeply concerned" by the proposal and its possible economic impacts. "I am particularly concerned for coastal and island communities, including the Virgin Islands, where the imposition of these punitive measures will skyrocket costs of food and other everyday items that must be imported by the maritime industry."
The U.S. Virgin Islands economy has
Puerto Rico, which is trying to emerge from a massive bond bankruptcy, has
"Anything that impacts maritime trade has a disproportionate impact on the jurisdictions of Hawaii, Puerto Rico and the U.S. Virgin Islands," said Vicente Feliciano, president of Advantage Business Consulting, a Puerto Rico-based economic and business consultant. "The impact is at two levels. On the one hand, it raises the cost of living. On the other hand, it would increase the cost of operating businesses in these jurisdictions, making them less competitive."
Over 50% of commercial ships worldwide were manufactured in the United States, according to the Office of the U.S. Trade Representative.
American Association of Port Authorities President and CEO Cary Davis said in a letter to U.S. Trade Representative Jamieson Greer that it "urges the Office of the United States Trade Representative to reconsider its approach to countering Chinese dominance in the global shipbuilding industry by narrowing the scope of the proposed fees or reversing course until a more comprehensive strategy can by developed."
"As formulated, USTR's proposal would raise prices for consumers and businesses, lead to chaos across the nation's port and transportation industries and would not reduce the international shipping industry's reliance on Chinese shipyards," Davis said.
"The proposed fees would incentivize ocean carriers to consolidate traffic to the nation's largest ports, while cutting out small and medium-sized ports from their routes," Davis said. "This would cause significant congestion at large ports and the collapse of business lines at small and medium-sized ports. The results would be higher inflation, more unemployment, and higher trade deficits."
Davis said the measures would push business to Mexican and Canadian ports, from which goods would be transported by trains or trucks to the U.S.
The Office of the United States Trade Representative didn't immediately respond to a request for a comment.
