The maritime industry is warning that proposed tariffs on Chinese-made cranes used to move cargo to and from big container ships could delay expansion plans or make them more expensive.
In recent testimony before trade officials, the American Association of Port Authorities said plans to impose 10 percent to 25 percent tariffs on $200 billion worth of Chinese imports would have a significant impact on U.S. port operations. Of particular concern is the crane tariff, because China is the sole manufacturer of the cranes.
"Several U.S. ports have Chinese cranes on order, with a cost of up to $14 million per crane," said Kurt Nagle, the association's president and CEO. "The 25 percent in additional tariff would cost each of these ports millions of dollars and reduce U.S. ports' competitiveness with Canadian and Mexican ports vying for U.S. cargo."
The association is asking the U.S. Trade Representative to exclude cranes from the tariffs.
The State Ports Authority has eight cranes totaling $88.5 million on order from Shanghai Zhenhua Heavy Industries — five for the new Leatherman Terminal in North Charleston, two for the North Charleston Terminal and one for the Wando Welch Terminal in Mount Pleasant.
A 25 percent tariff on those cranes would amount to more than $22 million. But the authority is confident it won't be footing the bill, citing contractual terms that limit its exposure.
"Any tariff duty, if applicable, will not increase the cost of the cranes to the port," SPA spokeswoman Erin Dhand said. "The cranes are for a fixed price inclusive of any import taxes and duties."
Other port leaders aren't so confident they won't be held responsible for paying costly tariffs.
The Virginia Port Authority is in the final stages of a $320 million expansion of its terminals and a key piece of that project includes the delivery and installation of four cranes being built in China and scheduled for delivery in early 2019.
"In short, if cranes are left on the tariffs list, then it hurts our business plan," said authority spokesman Joe Harris. "It could potentially add to the cost of the cranes, delay completion of the expansion project and have an impact on our ability to efficiently process increased cargo volumes and maximize our investment."
John Reinhart, executive director of Virginia's port, is among more than 350 people who testified at a U.S. Trade Representative hearing last month on the proposed tariffs.
"We're optimistic that people from the USTR are listening and understand the impacts this could have on the industry," Harris said.
Seaports along the East and Gulf coasts are spending billions of dollars on new cranes, bigger terminals and other infrastructure to accommodate big container ships that are traveling from Asia through the expanded Panama Canal. That includes more than $2 billion being spent in the Charleston area on a deeper harbor, cranes and other equipment, a new container terminal and other projects.
"It is the speed to market and flow of cargo that keeps our economy, statewide and nationally, healthy and growing," Reinhart told the U.S. Trade Representative. "It helps to keep consumer prices down and confidence up. It is this flow that equates to jobs, added revenue and economic development throughout our communities ... There are just too many communities and workers depending upon it to put this project in jeopardy."
The federal Economic Development Administration, part of the U.S. Department of Commerce, has given a $1.9 million grant to Berkeley County for water infrastructure improvements at the Camp Hall Commerce Park off Interstate 26.
The grant will help provide reliable water service to the site, home of a new Volvo Cars manufacturing campus and an industrial park being developed by Moncks Corner-based utility Santee Cooper.
"This grant will allow us to make much-needed improvements and continue to attract even more high-paying jobs to the area," U.S. Sen. Lindsey Graham said in a statement.
The grant is part of a $600 million Economic Adjustment Assistance program funded by Congress.