Proposed port fees on ships manufactured in China are beginning to severely impact U.S. coal and agricultural exports. With U.S. coal inventories expected to rise, the uncertainty in agriculture markets is also growing as exporters are struggling to secure vessels for international shipments. Former President Trump is preparing an executive order that includes potential fines of up to $1.5 million on any China-made ships, which could further limit the availability of vessels necessary for transporting various U.S. goods.
Major exporters and transportation providers have reported that these proposed fees have already discouraged vessel owners from offering services for future coal shipments. Ernie Thrasher, CEO of Xcoal Energy & Resources, stated in a letter to the U.S. Department of Commerce that the enactment of these fees could halt U.S. coal exports within just 60 days, jeopardizing shipments valued at approximately $130 billion. This fee structure could increase the delivered cost of U.S. coal by up to 35%, diminishing its competitiveness in the global market.
Additionally, coal mines in West Virginia are preparing for potential layoffs as they face unsold inventories due to the anticipated decline in exports. The proposed fees may also hinder the U.S. ability to export essential energy products, including oil and liquefied natural gas, according to the American Petroleum Institute. U.S. farmers, already affected by retaliatory tariffs, now find themselves in a precarious situation due to the proposed ship fees.
The uncertainty regarding shipping costs is limiting their ability to sell bulk agricultural products like corn and soybeans. Estimates indicate that bulk agricultural exporters could incur an additional $372 million to $930 million in yearly transportation costs due to these fees, greatly impacting their market competitiveness. The American Soybean Association emphasized that rising costs could eliminate the advantages provided by an efficient domestic transportation system.