The Biden administration’s top trade official has concluded that Beijing’s support for shipbuilding amounts to unfair practices, setting the stage for the US to levy penalties against China.
Sources familiar with a probe by US trade representative Katherine Tai told Reuters that her office has concluded that China’s unfair policies allow it to dominate maritime logistics and shipbuilding.
The report of the decision comes as US President Joe Biden takes a harder stance on China that has included putting its largest shipbuilder and shipowner on a military blacklist, as well as investigations by the trade representative into Beijing’s involvement in other industries.
Washington’s tough-on-China stance could intensify after president-elect Donald Trump takes office next week.
Tai launched the shipbuilding investigation after a March petition by a coalition of trade unions led by the United Steelworkers.
One of the sources told Reuters that investigators in the Office of the Trade Representative determined that Beijing targeted the shipbuilding and wider maritime sector for dominance with financial support, barriers for non-Chinese companies and other policies.
Their report, which has not been released, also concluded that Beijing “severely and artificially suppressed China’s labour costs” in domestic shipbuilding, logistics and maritime.
There is no indication of whether the report by Kai’s office recommends remedies, but its findings are expected to give the Trump administration ammunition.
Both Biden and Trump, during his first term, have used the findings of US trade representative investigations to impose tariffs on China.
The unions proposed in their March petition that the government levy a port fee of as much as $1m on Chinese-built ships that call in the US, and they suggested the funds could be funnelled into a shipbuilding revitalisation fund.
Congress is working on creating just such a fund for boosting US shipbuilding and shipping.
The recently introduced Ships for America Act, spearheaded by Trump’s pick for national security adviser, would also set up a Maritime Security Trust Fund to spend shipping fees and duties.
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