US delays tariff hikes on Chinese imports by at least 2 weeks

USTR announced a tariff increase in May on an array of Chinese imports, including ship-to-shore cranes, electric vehicles, lithium-ion EV batteries, steel and aluminum, semiconductor chips, solar cells, and medical products.

“In response to China’s unfair trade practices and to counteract the resulting harms, President Biden is directing his trade representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses,” the Biden administration said in a statement at the time.

The plan includes a 100% tariff on imports of Chinese-made EVs, a 50% duty on semiconductor chips, a 25% tariff on ship-to-shore cranes and 25% levies on steel and aluminum goods.

The tariffs were to be phased in over the next three years, with some taking effect in 2024, including electric vehicles, solar cells, steel and aluminum, and medical products.

Port authorities, terminal operators and industry groups across the U.S. pushed back against some of USTR’s planned increases, particularly on ship-to-shore cranes.

There are currently no U.S. manufacturers of ship-to-shore cranes, and the global market for the cranes is dominated by China-based companies such as Shanghai Zhenhua Heavy Industries Co.

The Port Authority of New York and New Jersey said new tariffs on China-made cranes would increase the cost of each crane by $4.5 million.

Port Houston recently approved the purchase of eight dockside electric ship-to-shore cranes for over $113 million from Shanghai Zhenhua Heavy Industries Co. It is the largest crane order in the port’s history.

Roger Guenther, executive director at Port Houston, said port officials submitted a comment to USTR saying they were concerned about the tariffs.

“We understand the U.S. Trade Representative is reviewing all comments and will provide a response on or before Aug. 1, when the tariff is set to take effect,” Guenther said in a statement.

The American Association of Port Authorities (AAPA) said there was no evidence of any security issues stemming from China-made cranes.

AAPA said that currently at least seven ports have 35 ship-to-shore cranes on order collectively from Chinese manufacturers. The contracts were signed prior to the announcement of the proposed 25% tariff and could add $131 million in new costs to the port’s orders.

“Simply put, AAPA is confident that the tariff, if imposed, will not meet its stated objectives,” Cary Davis, AAPA’s president and CEO, said in a letter to USTR. “Instead, it will only result in negative outcomes, including grave harm to port efficiency and capacity, strained supply chains, increased consumer prices, and a weaker U.S. economy.”