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Ag exports at risk if fees imposed on Chinese-built ships

Several ag organizations say a proposal from the U.S. Trade Representative’s Office to impose fees on Chinese-built ships would harm U.S. agriculture.

“The consequences would basically be little, if any, ag exports from the United States,” says Chuck Conner with the National Council of Farmer Cooperatives.

A proposal from the Trump administration under Section 301 would impose a fine of up to $1.5 million for each port call by a ship that was built in China or just owned by a Chinese company. The National Grain and Feed Association says five of 21,000 ships operating in the world’s bulk shipping fleet were built in the United States.

Conner says if the U.S. taxes Chinese vessels, the U.S. doesn’t have a fleet to export.

“We don’t, period. We don’t have the vessels to ship and haven’t for decades.”

Indiana farmer Mike Koehne testified on behalf of the American Soybean Association at a hearing on Monday. He tells Brownfield the higher shipping fees from a lack of vessels for ag exports make U.S. soybeans less competitive globally and imports for farm products will get more expensive.

“Farming right now is a dwindling economy and we don’t want to take any more hits,” says Koehne.

The Office of the U.S. Trade Representative is holding a two-day hearing this week to hear from stakeholders on the proposed actions on Section 301 investigation on China’s targeting of maritime, logistics and shipbuilding sectors.  Conner says he’s optimistic the Trump administration will use the feedback from this week’s hearings to create broader policy.

NGFA President and CEO Mike Seyfert tells Brownfield this effort could move quickly.

“We’re hopeful, if the administration moves forward, they’ll take a look at the unique role agriculture plays here in terms of exports and the critical inputs that are coming in,” says Seyfert.

The NGFA says they’ve asked the Trump administration to consider other ways to promote the U.S. maritime industry, such as shipbuilding grants, tax credits, and reduced regulations. However, if the USTR moves forward with proposed penalties, NGFA wants agricultural commodities exempted.

The second day of the USTR’s hearing is Wednesday.