American Association of Port Authorities Warns of Tariff Impact on Port Modernization

Strategic Insights -

The American Association of Port Authorities (AAPA) has expressed strong opposition to new U.S. tariffs on port equipment and shipping, warning that these measures would hinder the modernization of America's ports and hinder the country's competitiveness. The Office of the U.S. Trade Representative (USTR) announced modifications to a series of tariff actions, including 100 percent tariffs on certain ship-to-shore cranes and cargo handling equipment. The AAPA argues that tariffs on key equipment will increase costs for shipping goods through U.S. ports, challenging the seaport industry to finance large, modern equipment like cranes.

Key Takeaways:

  • The AAPA opposes 100 percent tariffs on STS cranes, as it effectively makes imported cranes more expensive due to the lack of a U.S. manufacturer of such equipment.
  • The association warns that imposing a 150-percent tariff on certain cargo-handling equipment would set back port expansion and modernization for years.
  • The AAPA urges the Trump administration to reverse course on these tariffs and instead support U.S. businesses through targeted tax credits and increased funding for port infrastructure.
  • U.S. port officials have expressed growing frustration over the impending tariff adjustments, complaining that meetings with Trump administration officials yielded no positive outcome.
  • Tariffs on cranes would force public port authorities to pay more for equipment, potentially undermining modernization efforts.
  • The tariffs would also compromise the Port of Los Angeles's ability to handle a significant number of foreign-built or operated vessels, with 20 percent of ships being foreign-operated.

Statistics:

  • 100 percent tariffs on STS cranes would effectively make imported cranes more expensive.
  • 150 percent tariff on certain cargo-handling equipment would set back port expansion and modernization for years.
  • Over 20 percent of ships calling at the Port of Los Angeles' terminals are foreign-built or operated.
  • 22 vessels are expected to call at the Port of Los Angeles during the week of Oct. 12-18.
  • The Port of Los Angeles is facing "multiple impacts" from the U.S. trade war and the ongoing federal government shutdown.

Sources:

  • (Source: Recycling Today, October 16, 2019)
  • (Source: AAPA, October 10, 2019)
  • (Source: Seatrade Maritime News, October 2019)
  • (Source: Port of Los Angeles, October 2019)