Council Hails a Near-Term Win on Trade

The agreement between President Trump and China’s President Xi Jinping last month to pause for the coming year the escalating tariff war between the United States and China included an agreement to also postpone the mutual imposition of fees on maritime shipping. Earlier this year the Trump administration had, through the U.S. Trade Representative (USTR), proposed targeted fees on all vessels built in China, regardless of their flagging, when entering U.S. ports.

If a vessel made multiple port calls – for example calling at the ports of Los Angeles, Oakland and Seattle – it would pay the same fee three times. A hidden tax on trade that would increase costs for businesses and consumers beyond the effects of tariffs, the proposed fee would also burden U.S. exports by taxing Chinese-made ships carrying U.S. exports to other markets, raising the cost of U.S. goods overseas. China responded with a retaliatory port fee.

While strongly supporting the goal of revitalizing shipbuilding in the United States, the Bay Area Council submitted testimony to USTR opposing the proposal. While the agreement to suspend the port fee for the next year doesn’t resolve the longer-term uncertainty around port fees that shippers face, it represents a welcome near-term win for international trade.