Proposed Billion-Dollar US Levies on Chinese Ships Risk ‘Trade Apocalypse’

For a symbol of the chaos engulfing world trade since the Trump administration walked into the White House, look no further than a pile of 16,000 tonnes of steel pipes.

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Stevedores in Germany should be preparing to load the first batch on a ship bound for a massive energy project in Louisiana. Instead, the cargo is sitting in a German warehouse after Washington proposed putting million-dollar levies on Chinese ships docking in the U.S.

Talks over the terms for shipping the pipes were put on hold until there is more clarity, said Mr. Jose Severin, a business development manager for Mercury Group, the logistics provider for the deal. For that particular route across the Atlantic, 80 percent of the ship owner’s vessels were built in China, meaning a shipment would be subject to a surcharge of between US$1 million (S$1.3 million) and US$3 million. Depending on how the measure is applied, that could amount to double or triple the current cost of shipping the steel pipes from Germany.

It is one of countless deals caught in the crossfire sparked by a proposal from the Office of the US Trade Representative (USTR) aimed at curbing China’s dominance of the shipbuilding, logistics, and maritime industry.