Supply chain stakeholders assess proposed U.S. shipbuilding remedies

A group of more than 30 organizations representing a wide range of the ocean-going shipping supply chain yesterday released a report that examines the net economic impact of the Office of the U.S. Trade Representative’s (USTR) proposed shipbuilding remedies intended to penalize ocean carriers that use Chinese-built ships. 

Titled “The Economic Effects of Proposed Action in the Section 301 Investigation of China’s Maritime, Logistics, and Shipbuilding Policies and Practices,” the report was released ahead of the USTR's hearing on the “Proposed Action in Section 301 Investigation of China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance” being held this week to help guide discussions about how to best assist the U.S. shipbuilding industry that will take place there.

The Association of American Railroads and the Intermodal Association of North America (IANA) are among the 30 organizations that released the report.

Conducted by Trade Partnership Worldwide LLC, the report's includes the following key findings:

• The proposed remedies would negatively impact the U.S. economy, reducing output and likely worsening the trade deficit;

• While the U.S. shipbuilding industry might benefit, other sectors like farming, manufacturing and retail would suffer significantly;

• U.S. agriculture exporters and workers would be hit hard, with major crop exports dropping dramatically, losing competitiveness to countries like Brazil, Canada, Russia and Australia;

• Energy exports and goods from various manufacturing industries would decline due to higher shipping costs and reduced trade;

• U.S. ports and related sectors would face negative impacts on output and employment; and

• The negative effects would ripple through supply chains, affecting manufacturers, importers, retailers and other stakeholders like wholesale and retail trade, hospitality and consumer services industries.

The report concludes "a comprehensive assessment of the various remedies suggested by USTR finds that in every case they would result in net losses for the U.S. economy, U.S. trade, and most of the U.S. shipbuilding supply chain. The proposed remedies, individually and in aggregate, would reduce U.S. GDP and likely worsen the overall U.S. trade deficit," according to IANA's press release on the report.