US Labor Unions Propose Fee On Chinese-Built Vessels Docking At US Ports

US labour unions have been demanding fees to be levied on Chinese-built vessels that dock at US ports in reaction to what they have considered unfair shipbuilding tactics by the People’s Republic of China (abbreviated as the PRC). Per the proposal, the funds generated from the fees would be used to establish a shipbuilding revitalization fund to support investments in the domestic shipbuilding industry, including the supply chains, capacity, and workforce.

The suggestion was included in a petition submitted by the United Steelworkers (abbreviated as the USW) on Tuesday, coupled with other unions with enough support from Senators Tammy Baldwin (D-WI) as well as Bob Casey (D-PA), by Section 301 of the Trade Act of 1974.

The petition also urges the US Trade Representative (abbreviated USTR) Katherine Tai to launch a robust investigation into the unfair trade practices of the PRC in the shipbuilding sector. The unions further argue that the anti-competitive practices reportedly undermine US workers and pose a national security risk.

The petition also offers a wide range of remedies, including fines on Chinese-built vessels that dock at US ports, to level the playing field and incentivize the eradication of Chinese unfair practices. Section 301 of the Trade Act of 1974 empowers the USTR to respond to foreign government duly acts, practices or policies considered discriminatory or unreasonable and restrict or hinder US trade.

The USTR has several options, including levying taxes and other import restrictions and levies. The petition requested that the USTR charge a fee for each China-built vessel that docks in a US port. The proposal stated that the fee has to be based on the vessel’s tonnage from China docking in the US, with larger and heavier vessels costing more.

To motivate China to end unfair practices, the price should factor in the vessel’s age, with higher prices for newer boats. The unions also proposed creating a US Commercial Shipbuilding Revitalization Fund, which would be supported by the fees gathered from vessels built by China.

The fund is going to be used to fund the Construction Differential Subsidy (abbreviated as CDS) program, which has played an essential role in sustaining the domestic commercial shipbuilding industry for nearly 50 years despite unfair foreign competition.

The CDS program was defunded in 1982, precipitating the drop in the American commercial shipbuilding industry. Following the program, the US government paid US shipyards and shipowners up to 50% of the disparity between the expenses for constructing a vessel in the US and construction outside of the US.

Reference: MarineLog

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