Is the Trump administration’s plan to tax all Chinese-built ships a good idea?

The Trump administration lately released a plan for steep port fees on Chinese-built vessels which dominate global deal and are frequently in San Diego Bay The idea is to limit China s dominance in the seas by making it more expensive to use their vessels and in theory push the nation s importers into the arms of the comparatively small U S shipbuilding industry The new Chinese levies which wouldn t take effect until mid-October could cost an importer roughly a car according to estimates from the Port of San Diego There is concern from the shipping industry that the levies on top of tariffs could significantly impact global commerce U S shipbuilding is practically nonexistent compared to China and others Critics argue there is no way at the moment for the U S to catch up and the whole plan will just mean increased costs for consumers President Donald Trump has argued it is vital for national prevention that America builds up its shipbuilding industry Question Is the Chinese-built vessel levy proposal a good one Economists Caroline Freund UC San Diego School of Global Protocol and Strategy NO It will act as yet another tax on the U S consumer without spurring resources in shipbuilding Shipbuilding is a huge complex endeavor and expanding quota would take a multitude of years Trump s record of on-again off-again tariffs means that this agenda is unlikely to promote any new resources since the levy could be gone the following morning Moreover China would likely retaliate with a tax on U S -built aircraft hurting the U S aerospace industry and its workers David Ely San Diego State University NO The U S cannot fast create the threshold to produce ships at a volume sufficient to replace Chinese-built vessels that are now docking at U S ports A levy imposed now would drive up transportation costs that will be passed onto consumers Policies to incentivize capital stake in the U S shipbuilding industry and grow the workforce should be emphasized in the near term The levies should be delayed until the restoration of the industry is underway Ray Major economist YES The vessel levy is another tool in the tool box that the U S can use to encourage China and other countries to adopt a more fair transaction guidelines They can easily be removed when a business deal is in place The levy amounts to of the value of a car Kelly Cunningham San Diego Institute for Economic Research NO Attempts at micromanaging the economic activity are unproductive and detrimental Top-down manipulation of shipping production will cause unintended consequences and dysfunction Imposing complicated rules and tariffs for shipping goods and services makes exchange more expensive and lessens productivity of all Voluntary exchanges of free exchange benefit all participants and facilitate the specialization and division of labor Economic enhancement is not zero-sum where one gains at the expense of others losing Put free back into free agreement Alan Gin University of San Diego NO The economic infrastructure is not here for more shipbuilding in the U S One matter is that not enough steel is produced in this country Another is that labor is more expensive here and there is less desire to work in manufacturing Those situations could improve in the future but it would take a long time and the U S is not likely to approach China s shipbuilding threshold In the meantime consumers will be hurt as prices for products carried by Chinese ships will increase James Hamilton UC San Diego NO It would be hard to find a business or consumer in America who would not be affected through the goods they try to produce buy or sell by this protocol Any effects on U S shipbuilding would be years down the road And the very long-term investments that are required to build more ships are intricate to influence with policies that come out of nowhere and may have changed by the time these words hit print Norm Miller University of San Diego YES Nothing says free sector commercial sector like a special fee slapped on vessels built somewhere else It s a genius idea Why compete by building better and bigger ships or planning ahead Who demands cheaper shipping and global agreement stability anyway After all the tariffs consumers and businesses will barely notice the extra costs Of lesson I m sure China will just graciously accept the new levy with no retaliatory measures that could hurt the U S exporters Sarcasm noted Executives Phil Blair Manpower NO All tariffs and port fees will clearly increase the cost of goods for Americans Both new expenses will be passed on directly to consumers The U S shipbuilding industry is so expensive compared to the rest of the world due to very high wages compared to wages paid in other countries for equal skills That spread in wages may be acceptable to Americans to encourage well paid jobs but consumers need to know why certain industries in the U S cannot compete with other countries on price Gary London London Moeder Advisors NO I am sympathetic to measures that are designed to reduce Chinese dominance across broad sectors However the more realistic approach would be policies that incentivize shipbuilding elsewhere across the globe This is not different than the other tariff-led domestic manufacturing goals The economics of manufacturing mostly don t work here primarily due to the cost and shortage of labor Why don t we spread more business to other nations rather than indiscriminately slap everyone with tariffs Austin Neudecker Weave Development NO A levy on Chinese-built vessels will raise costs for U S importers and consumers without offering any strategic benefit China dominates shipbuilding due to infrastructure that our domestic producers abandoned decades ago Rebuilding a competitive ship industry would take years require major executive subsidies and yield higher-cost products Punitive fees will not change these fundamentals they will further disrupt arrangement and shift demand to other low-cost countries not revive U S shipbuilding Jamie Moraga Franklin Revere YES If it s being used as a negotiation tactic in the agreement war If not while national shield stability and local shipbuilding advance are critical adding levies to tariffs this year may not be wise A measured approach is needed too much too soon risks U S supply chain disruptions higher costs job losses and higher prices Rebuilding U S shipbuilding requires considerable time and commitment Implemented too soon new levies could do more harm than good without strong domestic infrastructure Chris Van Gorder Scripps Medical NO Like multiple of President Trump s ideas it could be very good as a long-term strategy but not good as a short-term economic decision It would take several years to build up our own ship construction capabilities and in the meantime prices consumers pay now will be increased Let s develop a long-term strategic plan not a short-term reaction that will not benefit the average person or business Bob Rauch R A Rauch Associates YES The levy aims to revive U S merchant shipbuilding which has declined in contemporary decades With China controlling more than of global shipbuilding the agenda could encourage diversification and counter territory abuses While industry stakeholders worry about costs and business disruptions fees apply only to Chinese-linked or Chinese-built vessels The long-term impact remains uncertain but the procedures signals a strategic shift toward reducing reliance on Chinese-built ships Have an idea for an Econometer question Email me at phillip molnar sduniontribune com Follow me on Threads phillip