By : Magdy Sadek
Did the American gorilla wake up from its slumber last Friday morning to come out through the US Trade Representative (USTR ) imposing maximum sanctions that are not only run by Chinese companies but also ships that were simply built from the Chinese dragon?!
I had written an article in the fifth issue of ALAM ALMAWANI Saudi magazine, issued in November 2024, entitled: What lies ahead for the Chinese Dragon and American Gorilla in shipbuilding industry?
“Headache” for maritime transport industry
In it, he monitored the “headache” that the maritime transport industry is experiencing, specifically the shipbuilding industry, and its decline in the face of the Chinese dragon’s expansion even within the USA, to the point that members of the US Congress raised the issue of the collapse of the commercial shipbuilding industry in the face of the Chinese Dragon that is expanding within many of the world’s ports in an attempt to besiege the American Gorilla.
Members of Congress and Biden,s letter
Where 10 members of Congress sent a letter at the time to former President Joe Biden warning of dire consequences if the United States did not review its commercial maritime industry, considering it a national security concern for it, as the United States’ production of commercial ships, which produce about 1% of the gross domestic product, has stopped in the face of China, which has increased by 38.1%, and the US Navy, which owns 177 commercial ships in 2023, while the Chinese Navy in the same year amounted to 1,749!
Proposal of USTR
Following Trump’s tariffs, the US Trade Representative’s proposal to impose maximum penalties on the use of ships not only operated by Chinese companies, but also ships simply built in China, in national ports. Shipbuilding will also be one area in which the Trump administration will try to counter China’s growth in recent years.
The US Trade Representative (USTR ) has announced a proposal targeting Chinese-made ships and Chinese shipping companies, imposing port fees ranging from $500,000 to $1.5 million per call.
Section 301 of the Trade Act of 1974
As reported by the US press, the White House Trade Representative’s Office (USTR ) has begun studying ways to implement Section 301 of the Trade Act of 1974 to counter China’s strategy to dominate the shipping industry as early as 2024.The law gives the president broad authority to take action against foreign countries that engage in unfair trade practices.
Restricts U.S. commerce
The USTR has determined that China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance is unreasonable and burdens or restricts U.S. commerce, and is therefore actionable,” the USTR wrote.
But what is more exciting is that Chinese companies like COSCO, which is the largest shipbuilding conglomerate in China and is owned by the Chinese government, will not only feel the pressure. Any shipping company with a Chinese-made ship or an order placed at a Chinese shipyard could fall into this network.
The proposal, which remains open for public comment until March 24, 2025, comes on the heels of a U.S. Trade Representative’s determination that China unfairly dominates the global shipbuilding industry through subsidies, aggressive industrial policies and state-backed financing and to be unreasonable and to burden or restrict US commerce.
Every US port is expected to subject any vessel operated by Chinese interests to either a $1 million fee per vessel, for any vessel of any size, from tugs to supertankers, or $1,000 per NT
U.S. shipbuilding industry “in a very precarious position.
The USTR claims that China’s influence “burdens or restricts U.S. trade” and puts the U.S. shipbuilding industry “in a very precarious position.” During the period from January to June 2024, China completed shipbuilding projects totaling 25.02 million NT tons, an increase of 18.4 percent compared to the same period last year, according to figures published by the Chinese news agency (Xinhua). This reflects a remarkable year-on-year growth of 43.9 percent. The question remains: What will happen to the volume of outstanding orders of 171.55 million NT tons in the face of this proposal if it becomes a decision?!
The proposal also includes a mechanism to ensure that an increasing percentage (1% by this year, 3% by 2027, 5% by 2028, and 15% by 2032) of U.S. exports are transported on U.S.-flagged vessels and a portion (5% by 2032) on U.S.-made vessels.
Support the requirements of the shipping sector
The collapse of the Congressional Industry Committee members had prompted calls for more trade incentives and changes to support the requirements of the shipping sector and intensify the training of merchant seamen. It seems that there are still many decisions in the White House’s “pouch” to restore American dominance in the shipping sector and limit the “invasion” of the Chinese dragon into the heart of the American gorilla’s home?
It remains for me to say that the “Gorilla” is an American economic system. The gorilla thinks before it eats, while the Dragon, which is the Chinese economic system, “eats and then thinks”!
مجدي صادق يكتب: هل استيقظت الغوريلا الأمريكية في مواجهة صناعة بناء السفن للتنين الصينى؟!
Source : ALAM ALMAWANI
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