US Hits China with 25% Crane Tariff
The Biden administration has slapped a 25 percent tariff on ship-to-shore cranes out of China amid a wider focus on U.S. port security and domestic manufacturing, alongside yet another shot at what President Joe Biden calls China’s “unfair trade practices.”
The crane tax is one of many new tariffs levied on Chinese exports by the White House, with the president also targeting steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells and medical products.
More from Sourcing Journal
In a statement released Tuesday, President Biden said the 25 percent crane tariff will help protect U.S. manufacturers from China’s “unfair trade practices that have led to excessive concentration in the market.” He also emphasized a need for U.S. industrial capacity to produce port cranes with “trusted partners.”
Previously there were no tariffs on ship-to-shore cranes manufactured in China, but the attitude around them has changed over the past year amid concerns that they may pose a national security risk. Additionally, one Homeland Security official warned of the U.S.’s “overreliance” on the China-built technology, and foreign-owned equipment in general.
The state-owned Shanghai Zhenhua Heavy Industries (ZPMC) is estimated to have manufactured 80 percent of the ship-to-shore cranes in the U.S., tallying more than 200 in total. The company has come under heightened scrutiny over its affiliations with the Chinese Communist Party (CCP) and concerns that its equipment could be used as spying tools by China.
ZPMC wouldn’t be the only crane manufacturer that would be impacted by the tariffs. Another manufacturer, the Finland-based Konecranes, which is also building ship-to-store cranes in China for the Georgia Ports Authority, would feel the hear
The White House signed off on a $20 billion overhaul to beef up security at the U.S. ports, with a major part of the investment focusing on domestic crane production. Paceco, a U.S.-based subsidiary of Japanese crane and shipping equipment manufacturer Mitsui, has been tasked with building new cranes for the ports—representing the first time in 30 years the technology will be manufactured in the U.S.
As part of Biden’s executive order, the U.S. Coast Guard will now be directed to mandate digital security requirements for the China-manufactured cranes.
Ship-to-shore cranes are integral to port operations, facilitating the movement of goods from vessels into the port.
President Biden’s decision came the same day he unveiled he would maintain tariffs imposed by President Donald Trump in 2018, which covered more than $300 billion worth of Chinese goods including finished textiles and apparel imports. That move—and the four-year U.S. Trade Representative (USTR) review that prompted it—did not go over well with retail trade groups.
That same four-year review essentially gave the go ahead to incorporate the tariff on the ship-to-shore cranes.
“With respect to ship-to-shore cranes, increasing Section 301 duties may be appropriate
to support the security interests of the United States from the threat of Chinese state-sponsored cyber intrusions of critical infrastructure,” the review reads.
Not everyone has agreed with the harsh attitude toward China, with the American Association of Port Authorities (AAPA) saying there is no evidence of any security issues stemming from China-made cranes in the U.S.
The uneasiness related to Chinese manufacturing extends to its maritime, logistics and shipbuilding sectors, with the USTR opening a probe into these practices last month.
The office is accusing the CCP of “unfair, non-market policies” after several unions requested an investigation into these industries, namely due to the government’s mandate that Chinese state-owned shipping enterprises and state-owned oil companies purchase and use Chinese ships.
At the time, China’s commerce ministry said it was “strongly dissatisfied” with the U.S. probe, saying the investigation was “full of false accusations.”
A recently released report from NBC News suggested that China-linked firms could be responsible for espionage on shipping outside the U.S.
Citing a report from Slovakia-based digital security company ESET, NBC News said that the cyber espionage group known as Mustang Panda introduced malware over the past five months to gain remote access to “computer systems belonging to cargo shipping companies based in Norway, Greece, and the Netherlands, including some that appeared to be aboard the cargo ships themselves.”
Robert Lipovsky, principal threat intelligence researcher at ESET, told the news outlet that the incident was “not a single occurrence,” also noting that there were “several distinct attacks at different, unrelated organizations.
A spokesman for China’s embassy in Washington denied the accusations.