With White House trade policies under review and recent announcements regarding tariffs and exemptions, the topic of trade is swelling into every board room, port and business involved in the supply chain.
* By Bridget Gorman Wendling *
With White House trade policies under review and recent announcements regarding tariffs and exemptions, the topic of trade is swelling into every board room, port and business involved in the supply chain. The biggest concern? The final direction is still very much in limbo, especially as it relates to ports.
Ports are vital to our communities as well as our economic position in the world; they keep both the goods we grow and manufacture for export and the goods we depend on in our daily lives moving through our communities and around the world. Seaport cargo activity accounts for 26 percent of U.S. GDP, supports the employment of more than 23 million people in the U.S., and generates more than $320 billion annually in federal, state and local tax revenues.
In March, President Trump signed a Presidential Proclamation to impose tariffs on imports of steel and aluminum, with a temporary provision exempting Mexico and Canada pending the NAFTA negotiations. A couple of weeks later, he signed two more proclamations temporarily exempting certain countries – Canada, Mexico, Australia, Argentina, South Korea, Brazil and members of the European Union – until May 1.
The tariffs imposed are a 25 percent ad valorem (“according to value”) duty on imports of steel and a 10 percent ad valorem duty on aluminum from non-exempted countries. Adjustments to tariffs might be made to non-exempt countries as countries are exempted on a long-term basis. In reaction to tariff announcements on steel and aluminum and on the pending section 301 intellectual property investigation, China announced $3 billion in retaliatory tariffs with the bulk of them targeting agricultural exports. The effect that these policy measures will have on ports is still uncertain, and which ports will be hardest hit depends upon what commodities are targeted for retaliation.