L1/ The Biden administration plans to impose new tariffs on Chinese-made ship-to-shore cranes (STS), which are critical equipment used in ports and terminals to load and unload ship cargo. U.S. port and marine terminal operators have objected to the measure, arguing that such tariffs would not be effective in facilitating new suppliers to enter the market, meaning that they are unlikely to incentivize businesses in the U.S. or other countries to start manufacturing these cranes. At the same time, these tariffs can lead to increased operating costs for U.S. ports, putting them at a disadvantage in international competition. An important reason why the White House believes that a homegrown crane industry should be established is that U.S. port and marine terminal operators do not consider Chinese-made cranes to pose a significant threat due to cybersecurity concerns.
L2/ NAWE's position: The association believes that the 25% tariff on Chinese-made ship-to-shore cranes (STS) is intended to penalize China's trade practices, but in practice it will not have the desired effect. This tariff proposal would hurt the U.S. for two reasons: the tariff would affect U.S. export trade because the operating costs of the ports would increase, which in turn would affect the entire export process, and the cost of goods for consumers would eventually increase due to the rising operating costs of the ports. If the U.S. maritime industry is unable to purchase new STS cranes from China, it will have a direct impact on the productivity of U.S. ports, and this decline in productivity can have a disproportionately harmful impact on the entire U.S. supply chain. This shows that the problem is not limited to ports, but will extend to the entire supply chain system, including the circulation and transportation of goods.
L3/NAWE's response is in response to a proposed new tariffs announced by the Office of the United States Trade Representative (USTR) in May. The new tariffs are proposed for Chinese-made electric vehicles (EVs), lithium-ion batteries, semiconductors, solar cells and medical devices. These industries have been identified by the Biden administration as "strategic industries" and considered critical to U.S. supply chains. The new tariffs impose tariffs ranging from 25% to 100% on Chinese-made electric vehicles, affecting about $18 billion in goods. The USTR also made its first new tariff recommendations based on a four-year review of existing tariffs imposed on about $360 billion of Chinese-made goods during the Trump administration. NAWE believes that the imposition of new tariffs on these strategic sectors would have a broad negative impact on U.S. interests. NAWE submitted the letter to express their opposition to these tariff measures, particularly the imposition of tariffs on Chinese-made ship-to-shore cranes (STS).
L4/ A 25% tariff on STS cranes in China would increase the cost of these cranes to between $15 million and $20 million. This high cost can put NAWE members (i.e., U.S. port and terminal operators) under extreme financial pressure when upgrading older or smaller cranes. Port and terminal operators may not be able to afford the cost of upgrading due to the prohibitive cost of upgrading. This will limit the size of the ships they can serve, as older or smaller cranes cannot handle larger, more modern vessels. NAWE believes that ports and terminals upgrading with China's new cranes will have to pass on these tariff costs to ocean carriers, who in turn will pass the costs on to shippers (i.e., the actual shippers of the goods). This means that the end consumer may bear these increased costs. Due to these increased costs, U.S. ports will be at a disadvantage in competition with Canadian and Mexican ports. Canadian and Mexican ports do not have to face the same tariff issues, so their operating costs will be relatively low, potentially attracting more international shipping business.
L5/ Tariffs are mainly aimed at Shanghai Zhenhua Heavy Industries (ZPMC), the world's largest crane manufacturer, which has an 80% share of the U.S. market. The USTR claims that the tariffs will support U.S. security interests and protect it from intrusions into China's state-sponsored critical infrastructure networks. NAWE questioned that there was no basis for the Chinese STS crane to pose a cybersecurity threat, explaining that all of the crane's operating software and internal drive systems were developed outside of China. NAWE emphasizes that the Chinese-made crane operating system is not used in U.S. ports, and the crane software is isolated from the external network through a firewall. While one of the purposes of the tariffs is to protect intellectual property in the United States, the lack of crane manufacturing enterprises in the United States means that there is no intellectual property to protect. NAWE also added that it will take years, if not decades, for the crane manufacturing industry in the U.S. to mature and become a reality.
（船岸起重机（Ship-to-Shore Crane, STS Crane）通常称为“岸桥”（gantry crane）。 岸桥是用于在码头上装卸集装箱船舶的重型起重设备，通常由一个或多个跨越船舶和岸边的大型桥架组成。 ）
L6/ Back to shipping, due to Yemen's Houthi attacks on Red Sea shipping, freight costs continue to rise, and some factories supplying Walmart said that the company's customers are asking for shipments a month earlier than usual to ensure timely delivery during the holiday season, and many manufacturers are trying to shorten the lead time to meet the advance order requirements of buyers in the United States and Europe to ensure timely supply during the holiday season.
L7/ According to freight market tracker Xeneta, the average cost of transporting a 40-foot container between Asia and Northern Europe in a short period of time reached $6,855 in late June, an increase of more than 110% in two months and an increase of about five times compared to the same period last year. This indicates that the cost of transportation has risen significantly, putting pressure on supply chains, and global importers, including US importers, are very nervous due to the uncertainty and disruption caused by the Red Sea crisis, and the crisis continues to expand with no end in sight, further exacerbating the anxiety of global importers. Drewry's May survey found that about 19 percent of U.S. customers and 26 percent of European customers are scheduling shipments ahead of time due to concerns about supply chain disruptions. Some are concerned that the U.S. plans to increase tariffs, which could push freight costs even higher, especially as exporters rush to ship goods ahead of the tariffs. The U.S. target cargo includes EV-related materials, battery components, and solar cells, and the advance shipment of these goods could further increase pressure on the freight market.
L8/ The Houthi attack, which began on 7 October, is now in its ninth month, with ships opting for longer routes to avoid the Red Sea for safety. Although major shipowners have added vessels in recent weeks and launched new routes from China, these measures have not fully eased the pressure on manufacturers, who have had to recalculate and evaluate production plans to accommodate tighter delivery times, anticipating additional costs and tight delivery times, which are expected to struggle to be profitable this year.
L9/ Despite high spot prices, carriers have limited ability to cash on high spot prices, as many freight costs are tied to long-term deals, increased capacity in the shipping industry and higher costs associated with longer export routes are also limiting potential profit growth for carriers like Maersk and CMA CGM, with some shipping lines breaking long-term contracts to take advantage of high spot rates. With both US President Joe Biden and former President Donald Trump promoting protectionist rhetoric, the US is likely to impose further tariffs. It is unclear how long this "vicious circle" of uncertainty and protectionist rhetoric over tariff policy will last.
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