US President Joe Biden’s administration has concluded that China uses unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, three sources familiar with the results of a months-long trade investigation told Reuters.
United States Trade Representative (USTR) Katherine Tai launched the investigation in April 2024 at the request of the United Steelworkers and four other American unions under Section 301 of the Trade Act of 1974, which allows the United States to penalize to foreign countries that engage in acts that are “unjustifiable” or “unreasonable,” or that burden U.S. commerce.
The researchers concluded that China was targeting the shipbuilding and maritime industry to dominate, using financial support, barriers to foreign companies, forced technology transfer and theft of intellectual property and procurement policies to give its shipbuilding and maritime industry an advantage, said one of the sources, who was not authorized to speak publicly.Keep reading
Beijing also “severely and artificially suppressed China’s labor costs in the maritime, shipbuilding and logistics sectors,” that source added, citing excerpts from the report.
No comment was immediately available from the USTR, the White House or President-elect Donald Trump’s transition team. Chinese officials were not immediately available for comment.
The research cites data showing China’s share of the $150 billion global shipbuilding industry has expanded to more than 50% in 2023 from around 5% in 2000, largely helped by government subsidies. , while the once-dominant American shipbuilders have seen their share decline below 1%. South Korea and Japan are the next largest shipbuilders.
The report offers a new cudgel for the incoming administration to punish China and could pave the way for the imposition of tariffs or port fees on Chinese-built ships, as proposed by unions. Such action would likely be taken after a public comment period, they said.
Trump used the same Section 301 statute to impose tariffs on hundreds of billions of dollars of Chinese imports during his first term after a USTR investigation found that China was misappropriating American intellectual property and coercing the transfer. of American technology to Chinese companies.
The USTR will release its findings later this week, days before Biden, a Democrat, leaves office on Jan. 20, the sources said.
The report comes on the heels of harsh criticism from the United States and other Western powers of China’s aggressive industrial policies and overproduction of raw materials such as steel, and reflects a rare bipartisan agreement on the need to improve American shipbuilding. China denies any wrongdoing.
The report comes after four years of efforts by the Biden administration to reduce China’s dominance by maintaining Trump-era tariffs, adding new ones, including on electric vehicles, and imposing a series of export controls.
Tai’s office last month announced a last-minute trade probe into aging “legacy” semiconductors made in China, which could lead to more U.S. tariffs on Chinese chips that power everyday goods from cars to washing machines and equipment. telecommunications.
Experts agree that rebuilding America’s once-vibrant naval and shipbuilding industry will take decades and cost tens of billions of dollars. Tariffs alone will not be enough, they said.
“China’s focus on the maritime, logistics and shipbuilding sectors to achieve dominance is the biggest barrier to the revitalization of US industries in those sectors,” the report concludes, according to an excerpt shared with Reuters.
Scott Paul, president of the American Manufacturing Alliance, a nonprofit labor-business association, said he found the findings compelling.
“My understanding is that… a process will be put in place to try to stop the erosion of our shipbuilding industrial base and start growing again,” he said.
Trump, who has said he will raise tariffs on Chinese goods to 60%, last week criticized his moves to dominate commercial and military shipbuilding, telling radio host Hugh Hewitt that the United States had “suffered greatly” and needed to change. of course.
He also suggested that the United States may have to turn to allies to build the warships needed for the US military.
Source: https://www.msn.com/en-ca/news/world/exclusive-us-probe-finds-china-unfairly-dominates-shipbuilding-paving-way-for-penalties-sources-say/ar- BB1rlsnb?mod=djemlogistics_h
