Everything, bar the kitchen sink, to upend trans-Pacific sea trade

EVEN as the tariffs war between China and US escalates, another perhaps more damaging clash looms on the horizon. The United States Trade Representative (USTR), the agency that sets Washington’s trade policies, has proposed a series of restrictions and levies that could upend trans-Pacific trade. The Trump administration will make a final decision next month.

Inter alia, USTR proposes levies of up to US$1.5 million on any Chinese-built vessels entering American ports. About 17 per cent of all container vessels calling at US ports are Chinese-made. Further, such a levy would effectively stop all of China’s state-owned Cosco container ships from calling at US ports. There will be additional fees on any shipping firm that has orders for Chinese-made vessels. Based on the percentage of vessels ordered from Chinese shipyards, additional fees would range from US$500,000 to US$1million per vessel entrance.

In the quaint language of the USTR, it wants to “obtain (sic) the elimination of China’s acts, policies, and practices ... in light of China’s market power over global supply, pricing and access in the maritime, logistics and shipbuilding sectors…”. To fix this perceived problem, the USTR proposes throwing everything, bar the proverbial kitchen sink, to wreck China’s dominant position in shipbuilding; in transporting goods by sea; as well as in making containers and the kit that moves containers from rail or road onto ships and back again.