Empty boxes cause April dip in cargo, but port expects strong May Overall cargo down 7%; Charleston to see bigger ships as Panama Canal expands

The MSC Chicago container ship passes by Waterfront Park on its way to the Port of Charleston’s Wando Welch Terminal. The State Ports Authority said it set a record in January with nearly 105,000 cargo boxes moving through its container terminals. File/Staff

On the same day South Carolina politicians and business leaders gathered to celebrate progress in preparing the Port of Charleston for bigger ships, President Donald Trump scuttled a foreign trade deal with Asia, creating new concerns about protectionism and its impact on the state economy.

"Protectionism will be a disaster for South Carolina," U.S. Sen. Lindsey Graham, a Republican, said after a meeting Monday in Mount Pleasant to discuss the next steps needed to deepen Charleston Harbor to 52 feet, giving the local port the East Coast's deepest shipping channel.

"We benefit probably more than any other state from a global economy," Graham said. "We have world-class manufacturing, and most of the products made in South Carolina are sold throughout the world. If you withdraw from the global economy, you get left behind."

Several of those South Carolina manufacturers were represented at Monday's gathering, as executives with automaker BMW, tire maker Michelin, chemical giant Eastman, power tools manufacturer Techtronic Industries and International Paper - which exports $550 million of products annually through the Port of Charleston - spoke of the port's significance to their business models.

"Our ability to be efficient with exporting is important to help support our U.S. workforce and grow the U.S. economy," said Chris Keuleman, IP's vice president. "The Port of Charleston is vital to that success."

Knudt Flor, president and CEO of BMW's manufacturing plant in Greer, the German automaker's largest facility and exporter of 265,000 cars annually, put it bluntly: "We need the world market."

But as news spread that Trump signed an order Monday withdrawing the United States from the Trans-Pacific Partnership, a proposal touted by former President Barack Obama that's meant to boost trade with Asia, concerns about access to the world market moved to the forefront.

"Scary winds are blowing around Washington these days in regard to protectionism," said U.S. Rep. Mark Sanford, a Charleston Republican who represents South Carolina's 1st District. "If it were to take hold, it would have disastrous consequences for this port. It's a reminder of how we all need to be vigilant."

Congressman James Clyburn, a Democrat who represents the state's 6th District, said Trump's my-way-or-the-highway attitude toward trade "really drives me up the wall."

"Sure, everybody wants to see America first, but to make 'first' an exclusive condition is a little bit crazy," Clyburn said. "We can’t be isolationists. We can’t wall off ourselves from the rest of the world. I hope this administration will really wise up and recognize that some balance has to exist here."

Tim Scott, a Republican senator, took a more conciliatory stance, saying: "It's a new administration. The best thing we can do is be positive and optimistic."

Scott added, however, that keeping the Port of Charleston competitive fits Trump's "make America great again" rhetoric.

"If you are going to have an 'America first' agenda, it starts with projects like the port," he said. "Without the success of this port, it’s very difficult to have success in an 'America first' economic revival."

The plan to dredge the harbor to 52 feet to better accommodate larger container ships traveling through an expanded Panama Canal to the East Coast was authorized in December by passage of the federal Water Infrastructure Improvements for the Nation Act. South Carolina legislators have already set aside about $300 million of the project's $509 million cost, with the rest to come from the federal government. At least some money has to be included in Trump's upcoming budget for work to start.

Clyburn, who worked closely with Obama to find money for dredging studies and engineering work, said he hopes "someone in our delegation can explain to this administration why putting this in the budget is important."

"I certainly am encouraged and believe that it will happen," Scott said when asked if he thinks funding will be a part of Trump's budget.

Another option, Graham said, is a proposed national infrastructure bill that would pay for such things as road and bridge repairs, and "we can put Charleston deepening in that bill to speed up funding."

"I’m optimistic that President Trump gets it, that he understands infrastructure is necessary to do business," Graham said. "If you want to make America great again, you need to make America competitive and deep ports in America keep us competitive."

There already has been great progress in the pre-dredging phases of harbor deepening, with feasibility studies and environmental reviews finished in about four years rather than the typical seven it would have taken the Army Corps of Engineers before it adopted a fast-track review process.

"We are 95 percent design complete," said Lt. Col. Matthew Luzzatto, commander of the Army Corps' Charleston district. He said design of the entrance channel dredging is undergoing an agency technical review and the Army Corps will continue to reach out to those businesses that use the port for their input on designs.

"We ultimately will be awarding projects this coming fall, and we’ll have a dredge in the water by December," Luzzatto said. He added the Army Corps wants to "get after this in the most aggressive manner possible and complete it as quickly as possible."

The dredging is scheduled for completion by the end of this decade, about the same time the State Ports Authority opens a new container terminal at the former Navy base in North Charleston. Those projects are part of $2 billion in capital improvements the SPA, state and federal governments are planning for the port in order to attract bigger ships.

"The biggest ships we can deploy, the more efficiency we can offer to our customers," said Rolf Nielsen, a senior vice president of Maersk Line North America, the port's largest shipping line accounting for about 25 percent of all cargo shipments.

Trump had sharply criticized the Trans-Pacific Partnership on the campaign trail as a "potential disaster" that would hurt U.S. businesses, and Scott said the president's withdrawal from the trade deal "should come as a surprise to no one."

"I am hopeful this puts us in a position to find better trade deals with willing partners around the world," Scott said.

Another trade deal could be on the chopping block soon - Trump has said he plans to sign an executive order stating his intention to renegotiate the North American Free Trade Agreement between the United States, Mexico and Canada.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_