USTR Begins Section 301 Investigation on Chinese Maritime, Logistics and Shipbuilding Sectors
The Office of the U.S. Trade Representative is beginning a new Section 301 investigation on alleged unfair practices in China’s maritime, logistics and shipbuilding sectors, the agency said in a news release April 17.
Requested by five labor unions in March (see 2403120059), the investigation will consider allegations that “China targets the maritime, logistics, and shipbuilding sector for dominance and engages in a wide range of unreasonable or discriminatory acts, policies, and practices that provide unfair advantages across maritime industries, such as shipbuilding, shipping, and maritime equipment,” a prepublication copy USTR’s initiation notice said.
That includes industrial policies to “unfairly capture market share,” directed mergers and “anticompetitive activities,” nonmarket advantages to Chinese firms, and a network of Chinese “upstream suppliers, foreign ports and terminals, shippers, and equipment and logistics software that allow advantageous use of information.” USTR also will consider Chinese intellectual property theft and control of shipping freight rates and capacity allocations, among other things, the notice said.
Those activities flood the market with Chinese-built ships and artificially depress prices, resulting in declines in the U.S. shipbuilding industry, USTR said in the notice.
The underlying petition, filed by the United Steelworkers, the International Association of Machinists and Aerospace Workers, the International Brotherhood of Boilermakers, the International Brotherhood of Electrical Workers and the Maritime Trades Department of the AFL-CIO, requested a fee on vessels built in China that dock at U.S. ports.
It also sought a new shipbuilding revitalization fund, actions “to support stronger demand for U.S.-built vessels,” actions “to address China’s drive to dominate port and logistics infrastructure platforms and equipment,” and “negotiations with other major shipbuilding countries to address any concerns about their own government support programs and coordinate measures to address China’s unfair practices.”
The petition said China’s Logink logistics management platform “has advanced its ability to access, surveil and control maritime logistics and transportation,” posing “a significant threat to U.S. economic and national security interests.” It said “the U.S. should work with friends and allies to restrict further deployment and utilization of such a system and end its use in existing ports.”
USTR seeks comments by May 22, and will hold a hearing May 29 in connection with the investigation. Post-hearing comments will be due a week after the hearing.
The launch of the Section 301 investigation comes the same day as an announcement that the Biden administration will seek to triple its separate Section 301 tariffs on Chinese steel (see 2404170040).
“The Biden-Harris Administration recognizes growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, are distorting the global shipbuilding market and eroding competition,” the White House said in an April 17 fact sheet. “President Biden believes it is critical to understand China’s uniquely aggressive set of interventions in these sectors, and to take actions that address distortions to the global market for commercial vessels, maritime shipping, and logistics that harm American workers and shipbuilders.”
The fact sheet also said it’s “vital” for U.S. Steel “to remain an American steel company that is domestically owned and operated,” again pushing back at a bid by Nippon Steel to acquire the Pittsburgh-based steelmaker (see 2403140022). U.S. Steel shareholders approved the takeover April 12.
The Coalition for a Prosperous America “welcomed” the announcement of the “new actions to protect America’s steel and shipbuilding industries from China’s predatory trade activity,” it said in an April 17 news release.