AAFA reacts to USTR determination on Section 301 shipbuilding proposal

The American Apparel & Footwear Association (AAFA) warns of serious consequences over today's announcement by the Office of the U.S. Trade Representative (USTR) to implement steep new taxes on ships calling on U.S. ports as a result of the Section 301 investigation into China’s practices in the maritime, logistics, and shipbuilding sectors.

AAFA has actively opposed these measures. On March 24, AAFA testified at a hearing before the USTR Office and submitted comments opposing the proposal. Additionally, AAFA conducted a study determining that the proposed fees would harm U.S. farmers, workers, and the broader economy.

Today's action imposes a phased fee structure targeting Chinese vessel operators, Chinese vessel owners, and Chinese built vessels. In addition to the fees, USTR proposes additional tariffs ranging from 20 percent to 100 percent on equipment crucial to transportation networks: containers, chassis, and ship-to-shore cranes. These fees and tariffs will reduce U.S. trade resulting in losses for American businesses and will further raise costs for American consumers.

“We are deeply concerned that the newly announced port fees and shipping mandates are destined to have devastating consequences for American workers, consumers, and exporters. With fees as high as $1.5 million per port call, these measures are driving up shipping costs, shrinking GDP, and reducing U.S. exports. When ocean carriers raise rates, American families will pay the price through higher costs and growing product shortages, at a time when they can least afford it. Smaller regional ports will see fewer vessel calls, putting local jobs at risk and disrupting the flow of U.S. goods," said Nate Herman, AAFA Senior Vice President of Policy. "We fully support strengthening the U.S. maritime industry, but penalizing shippers for not using American-flagged or built vessels, when they cost up to five times more and remain in limited supply, is counterproductive. It is telling that the administration made this announcement after markets closed today, and when the markets won’t open again until Monday, masking a decision that is bad for the economy - bad for American farmers, bad for American manufacturers, bad for American businesses, and bad for hardworking American families.”