The State Ports Authority is asking the Trump administration for an exemption from proposed tariffs on Chinese-made goods, saying the import tax would cost the agency an extra $36 million for a dozen ship-to-shore cranes it is buying.
"It doesn't stop us from buying the cranes but it obviously puts a dent in our capital plan," said Jim Newsome, the authority's president and CEO. "We feel very strongly that this is public infrastructure that supports the economy of the country and the region."
Newsome sent a letter last week to U.S. Trade Representative Robert Lighthizer asking for the exemption, saying the tariff "would negatively affect (the authority's) competitiveness" and possibly delay delivery of cranes that have been ordered and prohibit future orders.
Newsome plans to visit with Lighthizer soon to make his case.
"We're not the only port in this situation," he said.
The issue has been a concern for maritime officials since Trump's trade war with China began last year. The American Association of Port Authorities in August lobbied against the tariffs when cranes were first included on a list of $200 billion of Chinese imports. The White House removed the cranes from that list a month later.
The SPA at that time had eight cranes on order from a Chinese manufacturer, but the fixed-price contract for those cranes included all import taxes and duties. Contracts for the most recent crane purchases don't include those costs.
The authority is spending $2.4 billion to modernize its terminals, increase capacity and buy new equipment. In addition, the state and federal governments are spending $558 million to deepen Charleston Harbor to 52 feet so big container ships traveling through the Panama Canal can visit the port at any time regardless of tide.
Other seaports along the East and Gulf costs are also spending billions on infrastructure and new equipment, including large ship-to-shore cranes that are only built in China.
Kurt Nagle, president of the national port association, has said tariffs on cranes "would cost each of these ports millions of dollars" while providing a boost to Canadian and Mexican ports "vying for U.S. cargo."
The proposed tariffs would be in addition to 25 percent import taxes already charged on about $200 billion worth of Chinese goods now entering the United States. The White House hasn't said when the newest tariffs on another $300 billion worth of goods might go into effect. A public hearing on the tariffs is scheduled for next week.
"The ability to purchase equipment at a competitive price is critical to the port’s growth strategy and plays a direct role in the long-term success of our state, region and nation," Newsome said in his letter to Lighthizer.
Trump said he is using tariffs to force China to address U.S. concerns over the theft of trade secrets and subsidies on Chinese-owned enterprises. The White House also wants China to open its markets to U.S. companies.
China has vowed to retaliate with its own tariffs if the Trump administration moves forward with its plans. For example, the country last month hiked tariffs on $60 billion worth of U.S. goods.