THE BIDEN Administration has included a 25% tariff on all ship-to-shore gantries of Chinese manufacture as part of a broader trade attack on Chinese imports.

London-based World Cargo News last night [16 May] exclusively reported that the Office of the United States Trade Representative had completed its investigation into “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property and Innovation (section 301 investigation).”

In a White House memorandum President Biden noted that, while imposing tariffs under section 310 of the Trade Act “has been effective in encouraging China to take positive steps in addressing the issues identified in the section 301 investigation, such as certain revisions in its foreign investment and administrative licensing laws, China’s actions do not represent a systematic and sustained response to the issues raised in the section 301 investigation.”

The Biden Administration has therefore determined that “additional section 301 tariffs would provide incentives for China to eliminate the acts, policies, and practices at issue.” These new tariffs include 25% on STS cranes from China, due for delivery in 2024, where previously there were none.

Previously, on 22 February, President Biden issued a directive that Chinese-built cranes be replaced by Japanese units, at a cost to US taxpayers of US$40 million.  This decision came after Shanghai Zenhua Port Machinery Co, better known as ZPMC, was named in a US Congressional probe as fitting its cranes with unexplained “cellular modems” suspected of allowing remotely-accessed, covert communications. 

ZPMC is a subsidiary of Shanghai Zhenhua Heavy Machinery Co, itself a division of the government-owned China Communications Construction Company. ZPMC is reckoned to have a 80% share of the global STS gantry market and its cranes are installed at every major container terminal in Australia. The company also owns a fleet of 26 specialised heavylift vessels, used to deliver the cranes worldwide.

ZPMC subsequently said it took the US concerns seriously and “believes that these reports can easily mislead the public without sufficient factual review. The cranes provided by ZPMC do not pose a cybersecurity risk to any port.”

As WCN noted, the US does not manufacture STS cranes and so the new tariff is not about protecting domestic industry. The USTR report into China and section 301 of the Trade Act published this month notes: “With respect to STS cranes, increasing section 301 duties may be appropriate to support the security interests of the United States from the threat of Chinese state-sponsored cyber intrusions of critical infrastructure.”

ZPMC is not the only Chinese builder of STS equipment and some European companies such as Konecranes have manufacturing bases there. WCN suggests the 25% tariff will make other builders more price-competitive but doubts any can match ZPMC’s output or efficiency.