Shortsighted bid to 'restore' dominance

While countries are reacting to the United States' tariff war, they should be aware that an executive order US President Donald Trump signed on Wednesday might have more immediate, grave and far-reaching impacts on them.

The executive order, ostensibly intended to "restore American maritime dominance", calls for a Maritime Action Plan to revitalize the US' maritime industries. But its real focus is on China.

The order directs the US Trade Representative to make recommendations regarding countering what it alleges are China's "anticompetitive" actions within the shipbuilding industry.

It also directs the US government to work with the US' allies and partners to align trade policies with the aim of squeezing China out of the international supply chain and logistics sectors.

And it directs the USTR to move ahead with a proposal that includes levying million-dollar US port docking fees on any ship that is part of a fleet that includes Chinese-built or Chinese-flagged vessels.

Currently, it is estimated that about 90 percent of the world's ships are subject to the fee. But as the World Shipping Council warned, about 98 percent of the world's ships will be subject to the fee when they call at US ports because the charge applies both to existing and future Chinese-built ships and to any carrier that has at least one Chinese-built ship on order.

However, eliminating China from the international supply chain and logistics sectors is purely wishful thinking.

Industries today are a result of the global industrial distribution of labor along complicated industry and supply chains that span the world and incorporate numerous countries and entities.

All these parties will be negatively affected by the US move that has already backfired in effect. For example Asian buyers, such as Japan, the Republic of Korea and Thailand, are reducing purchases of US agricultural products due to the US move, which has effectively shrunk the demand for US agricultural products. Traders revealed that the shortage of shipping capacity and the uncertainty caused by the trade war the US has launched against its trading partners are affecting purchases. Due to the influence of the executive order, some US soybean exporters have been unable to obtain soybean meal shipping quotes from shipping companies.

The strong opposition of US ports, shipping companies and commerce associations, as well as the trading companies and retailers that are related to these sectors should prompt the US administration to reconsider the wisdom of its push and shove.

That US Trade Representative Jamieson Greer on Wednesday repeated his comments from Tuesday, saying that not all of the measures outlined by the agency's original proposal would be implemented, should be seen as a sign that the US administration also realizes how damaging the effects of the measures will be if carried out to the letter. The USTR is expected to make its final decision on remedies by the middle of the month.

Just like the adjustment of the "reciprocal tariff" policy it has been compelled to make in the process of implementation, the US administration is reportedly considering charging the port fees based on a ship's tonnage, rather than charging a uniform fee. This will allow small ships to pay lower fees, which is expected to help reduce the pressure on small ship owners in niche areas such as grain transportation, reducing the impacts on US farmers.

Sources admitted to the media that when the Office of the US Trade Representative formulated the relevant plan, it mainly considered large container ships that transport retail goods, and they did not fully consider the impact of "docking fees" on the flow of goods.

That's only the tip of the iceberg when it comes to the US administration's lack of forethought in policymaking. It frequently has to do lot of patchwork in the process of implementing its ill-thought-out policies. While it brags that its policies will "Make America Great Again", all they really do is show how desperately low it will stoop to rob, steal or extort money from others.