Fossil fuel, agriculture officials to rail against Trump port fee plan

Fossil fuel and agriculture industry representatives are expected to criticize the Trump administration's plan to impose big fees on China-linked ships entering U.S. ports during a hearing in Washington on Wednesday, arguing the move would hobble their ability to export everything from coal to soybeans.

At issue are proposed fees on China-built vessels that could top $3 million per U.S. port call.

The Trump administration says the fees would curb China's commercial and military dominance on the high seas and promote a revival in U.S. shipbuilding, but numerous other U.S. industries, from miners to farmers, worry the fees will instead leave them with huge new costs and a dearth of ships to move their products to market.

"The reality today is that there is insufficient supply of suitable vessels for U.S. producers to charter which would enable them to avoid paying these fees," said Peter Bradley, CEO of coal and oil exporter Javelin Global Commodities, in a letter to the U.S. Trade Representative dated March 17.

Coal and agriculture officials had told Reuters last week that the proposed fees were already making it difficult to charter ships to export their products and leading inventories to swell.

Early market reactions to port fees have already led to a 40% increase in ocean freight cost for commodity shippers, many of which grapple with razor-thin margins, United Grain Corp said in a letter dated March 21.

The issue, along with the administration's escalating trade wars with China, Europe, Canada and Mexico, has revealed an unlikely faultline between U.S. President Donald Trump and the fossil fuel and agriculture companies that he had promised to support during his campaigns for office.

The USTR's hearing on Wednesday will be the last before the administration makes a decision on the proposal. During a hearing on Monday, ship operators complained the fees would hurt their businesses, while representatives of the steel industry expressed their support.

At Wednesday's hearing, speakers will include representatives of the American Petroleum Institute, the National Mining Association, the North American Export Grain Association, and the Agriculture Transportation Coalition, according to the schedule.