SH.BA must “fight fire with fire” and impose tariffs on Chinese -built ships to fund subsidies for its shipbuilding builders, said Donald Trump’s new appointment to run America’s maritime regulator.
“We need to compensate for the subsidies that China has given their shipbuilding industry, fight fire with fire,” told Louis Sola, who was appointed chairman of the Federal Commission (FMC) in January, Financial Times told. “Where should that money go (from tariffs on Chinese ships)? This money should be invested in American transport. “
Sola’s comments follow a recommendation from the US Trade (UST) to impose measures including tariffs up to $ 1.5 million in Chinese -built ships calling at US ports.
The Trump administration is expected to make a final decision on the proposal, made after an investigation launched under former President Joe Biden after a public hearing in March.
About 36,595 US port calls in 2024 could have been affected by UST measures, which could generate annual tariff revenue up to $ 52 billion, according to researchers at Shipbroker Clarksons.
“I don’t want to get their Goliath and tie my feet together,” the FMC chairman said. “I would rather put my champion there against him and the only way you can do this is you have to finance them.”
The proposal to impose punitive measures for Chinese ships calling on US ports is the latest attempt to increase American competition, a major goal for Trump. The US president told a joint congress session this month he would create a “White House building office” along with industry tax incentives.
“To increase our industrial defense base, we will also revive the American shipbuilding industry, including the construction of trade ships and the construction of military ships,” Trump told lawmakers.
American shipbuilders are unlikely to approach to compete with Chinese rivals in the near future, however, experts said.
Formerly one of the main shipbuilding sites, since the US March had provided only 0.2 percent of the global book of commercial transport orders in the gross offset tonnage, a measure of work taken to build a ship. This is compared to 59 percent of China, according to Clarksons Research.
The FMC, which regulates the global transport industry to protect the interests of US consumers, was assisting Usst to investigate it for Chinese transport prior to the public hearing on the tariff proposal, Sola said. The probe was initiated last year in response to US job unions seeking an investigation.
Sola argued that although the US had turned into a cheaper production subsidized by Asia, the country “has resources, it has facilities, it has people, and it has knowledge.”
He said the US can “get a large percentage” of production for cranes that load and download ships in the port, for which “technology is not so complicated”.
The widespread presence of Chinese -built cranes in US ports has been reviewed by US authorities since the Biden administration, amid the concerns they could be controlled from a distance.
Sola acknowledged that shipbuilding was a “much more complex animal”, but argued that SH.BA “could be a player in some of the smallest trading ships”.
FMC, whose lawyers and economists advise the government on legislation, is a politically independent government agency. But Sola, a FMC commissioner since 2019 who has run for Congress as a Republican candidate, has previously publicly supported Trump.
Sola said that “with the first advantages of President Trump of America, (FMC was) the main kind there”, adding that he was looking for a bigger budget so that the agency could hire more staff, despite the administration landing for other government agencies.
“Instead of being for the arts or radio or something like that, it is easy to see and touch what FMC does,” Sola said. He said he wanted to strengthen his head account by 30 percent, and that the FMC had sought to accelerate the employment process for the best candidates from a limited group of US marine experts.
FMC is a relatively small US agency, but its occasional cases have already increased in the back of increasing concerns about America’s confidence in foreign ship owners.
Noting the approval of the legislation that expanded the FMC powers to investigate and fine ship owners in 2022, Biden blamed “foreign ownership carriers” for rising prices that “damage American households” during Covid-19 pandemia.
Peter Sand, the analyst on the Xeneta transport market, warned that tariffs for Chinese transport presented by Ustrings “can cause major blockages and delays in the US.
The proposal comes as new tariffs imposed by the Trump administration, including steel and aluminum, and further taxes he has threatened are expected to increase import costs.
“The threat of even higher costs to import goods into the US should be taken very seriously,” Sand said.
Additional reporting by Demetrius sevastopulo
