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China dominance in maritime, logistics, shipbuilding actionable: USTR

19 Jan '25
2 min read
China dominance in maritime, logistics, shipbuilding actionable: USTR
Pic: Adobe Stock

Insights

  • China's targeted dominance in the maritime, logistics and shipbuilding sectors is unreasonable and burdens or restricts US commerce, and is therefore 'actionable' under Section 301, the USTR recently said after a probe.
  • China's targeting for dominance deprives market-oriented businesses of commercial opportunities, reduces competition, raises risk and reduces supply chain resilience, it found.
China’s targeted dominance in the maritime, logistics and shipbuilding sectors is unreasonable and burdens or restricts US commerce, and is therefore ‘actionable’ under Section 301, the office of US trade representative (USTR) recently announced after an investigation.

Section 301 of the Trade Act of 1974 is designed to address unfair foreign practices affecting US commerce.  Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government acts, policies and practices that burden or restrict US commerce. 

“Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalisation of US industries, as well as the communities that rely on them. These findings under Section 301 set the stage for urgent action to invest in America and strengthen our supply chains,” USTR Katherine Tai said in a release.

“Today, the US ranks 19th in the world in commercial shipbuilding, and we build less than five ships each year, while the PRC [People’s Republic of China] is building more than 1,700 ships.  In 1975, the United States ranked number one, and we were building more than 70 ships a year,” Tai said.

USTR’s investigation found China’s targeting for dominance unreasonable because it displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on China, increasing risk and reducing supply chain resilience. 

China’s targeting for dominance is also unreasonable because of Beijing’s extraordinary control over its economic actors and these sectors.

USTR further found that China targeting for dominance burdens or restricts US commerce by undercutting business opportunities for and investments in these sectors in the United States; restricting competition and choice; creating economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the US economy.

As the petitioner US unions have highlighted, the entrenchment of China’s dominance means that US international trade is “carried out on vessels made in China, financed by state-owned Chinese institutions, owned by Chinese shipping companies, and reliant on a global maritime and logistics infrastructure increasingly dominated by China.”

Fibre2Fashion News Desk (DS)

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