For a symbol of the chaos engulfing world trade since the Trump administration walked into the White House, look no further than a pile of 16,000 metric tons of steel pipes. Stevedores in Germany should be preparing to load the first batch on a container ship bound for a massive energy project in Louisiana. Instead, the cargo is sitting in a German warehouse after Washington proposed putting million-dollar levies on Chinese ships docking in the U.S.
Talks over the terms for shipping the pipes were put on hold until there¡¯s more clarity, said Jose Severin, a business development manager for Mercury Group, the logistics provider for the deal. For that particular route across the Atlantic, 80% of the ship owner¡¯s vessels were built in China, meaning a shipment would be subject to a surcharge of between $1 million and $3 million. Depending on how the measure is applied, that could amount to double or triple the current cost of shipping the steel pipes from Germany.
It¡¯s one of countless deals caught in the crossfire sparked by a proposal from the Office of the U.S. Trade Representative aimed at curbing China¡¯s dominance of the shipbuilding, logistics and maritime industry. China now produces more than half of the world¡¯s cargo ships by tonnage, up from just 5% in 1999, according to the USTR, with Japan and South Korea the other shipbuilding powers. Last year, U.S. shipyards built just 0.01%, and the USTR has an eye on reviving the fortunes of the long dormant U.S. merchant shipbuilding industry.
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