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WASHINGTON—Retailers are raising alarms over a proposed U.S. Trade Representative (USTR) policy targeting Chinese dominance in shipbuilding and maritime logistics, warning that it could significantly increase consumer prices and disrupt retail supply chains.
The National Retail Federation and the Retail Industry Leaders Association, joined by over 30 industry groups, submitted comments opposing the proposed remedies in the Section 301 investigation. They cited a study that found the measures would lead to higher costs across multiple sectors, including retail.
Read the full letter from NRF and RILA here
“Imports and exports decline as a result of the higher costs of the fees, and/or the mandate to use more expensive U.S.-built, U.S.-owned and U.S.-operated ships. While the potential negative impacts on U.S. agriculture are ‘headline-grabbing,’ those negative impacts extend as well to other sectors of the American economy, including retail. As higher costs filter through the economy, the wholesale and retail trade sectors, from stores to restaurants, see declines in sales and employment,” the study concluded.
Retailers are particularly concerned about a proposed port service fee that could be passed onto cargo owners, adding to supply chain costs. Industry leaders warn that ocean carriers may adjust their routes to avoid fees, skipping smaller ports and overwhelming larger ones, exacerbating congestion issues.
One retailer described the possible ramifications: “We are concerned that the trifecta of China and reciprocal tariffs; the new aluminum/steel derivative tariffs; and the China-ship fee will put extraordinary pressure on U.S. retailers. (One notable example would be cast aluminum outdoor furniture.) In some sectors that are already struggling under the current economic and housing market conditions, such as furniture and home improvements, the proposed fees could nearly double the cost to import these items.”
NRF Executive Vice President of Government Relations David French urged the administration to seek alternative strategies for boosting U.S. shipbuilding. “We encourage the administration to continue to investigate the barriers and limitations on U.S. shipbuilding and to seek other means to help revitalize the industry, without burdening those who rely upon it,” he said.
Michael Hanson, RILA’s senior executive vice president of public affairs, echoed the concerns. “The goal of revitalizing the American shipbuilding industry is laudable, however, these new fees will have ripple effects across the U.S. economy. If enacted, these policies will disrupt the flow of commerce, add regulatory burdens and increase costs on American manufacturers and consumers. RILA looks forward to collaborating with the administration on ways to revitalize the U.S. shipping industry while minimizing disruptions to competitiveness, businesses and consumers.”
