Friday, August 16, 2019

US Drops Tariff Hike on Chinese 53 Foot Domestic Intermodal Shipping Containers

Win for Trucking Lobby After Threats of Price Increases
Shipping News Feature
US – CHINA – The American Trucking Associations (ATA) has announced that it is pleased to have won the argument against increased US tariffs on Chinese produced 53 foot domestic intermodal shipping containers. In June, the ATA told the US Trade Representative (USTR) that the only two manufacturers of these kind of containers, used commonly in intermodal transportation, were located in China, and as such, freight transportation companies would have no choice but to pay the additional cost because no domestic alternative existed.

53 foot containers have been used by US companies for the past thirty years. The original US produced models often proved to be unreliable for ocean transport due to their flimsier construction in a unit designed to increase the carrying capacity of a standard 40 foot ISO box by up to 60%. The size however has a lasting appeal for a variety of US suppliers and carriers including the likes of Crowley Maritime, J.B.Hunt Intermodal and numerous rail companies.

The US has of course lately been ramping up pressure on China with a series of threatened, and imposed, import tariff increases. Whilst the current situation would not probably be described as a trade war as yet, there have certainly been some serious salvos fired by both sides.

The US is tying possible sanctions to the long established Chinese appetite for copyright infringement and so far, according to economic analysts, the US has already imposed punitive tariffs on US$250 billion of Chinese products, with threats to add a potential US$325 billion more. For its part China is said to have applied tariffs similarly to $110 billion’s worth of exclusively American produced goods.

The Chinese have another weapon in their armoury with the thinly veiled threat to punish US owned businesses operating in the country and the proscription of US investments in Chinese financial markets. As for this latest, small but significant, easing of the pressure, ATA Chief Economist and Senior Vice President for International Trade Policy Bob Costello, commented:

“Trucking and trade are synonymous and we are happy with this most recent announcement by the United States Trade Representative that these 53-foot domestic containers won’t be subject to tariffs. We explained that applying tariffs to these containers would have a tremendous impact on the entire freight logistics industry, and ultimately on US consumers, so we are very pleased with the decision.

“Because there are no US based makers of these containers, we estimate the logistics industry would’ve paid an additional $63 million in the first year, and nearly $750 million more over the next decade for the equipment if these tariffs had not been rescinded. We appreciate Ambassador Lighthizer and the entire USTR for their willingness listen to ATA on this critical issue and we look forward to working with them to continue to advance US trade interests and to grow our economy.”