President Trump’s plan to revive U.S. shipbuilding using massive fees on China-linked ships visits to American ports is causing U.S. coal inventories to swell, stoking uncertainty in the embattled agriculture market as exporters struggle to find ships to send goods abroad.
Trump is drafting an executive order that would rely on funding from a U.S. Trade Representative proposal to levy fines of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China.
Those potential port fees have limited the availability of ships needed to move agriculture, energy, mining, construction and manufactured goods to international buyers, according to major U.S. exporters and transportation providers in interviews with Reuters, letters to U.S. officials and comments ahead of USTR hearings next week.
Enacting and implementing those fees could cease exports of U.S. coal within 60 days, putting $130 billion worth of shipments at risk, notes Xcoal Energy & Resources CEO Ernie Thrasher. He also noted the fee structure could add up to 35% to the delivered cost of U.S. coal, making it uncompetitive on the global market.
The American Petroleum Institute also noted the proposed fees could also make it harder to export other energy products like oil, liquefied natural gas and refined fuels.
Bulk agricultural exporters could face an additional $372 million to $930 million in annual transportation costs from the fees, according to the American Farm Bureau Federation, which would represent substantial margin loss in global markets where competitiveness is often determined by mere pennies a bushel.
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