By Jamie Martin
The new administration's latest proposal, aimed at ocean carriers with ties to China, could significantly escalate shipping costs for America's farmers and ranchers.
According to the U.S. Trade Representative (USTR), the new fees target Chinese-operated and Chinese-built vessels at American ports, with charges reaching up to $1.5 million per port call.
This move, intended to counter China’s dominance in global shipbuilding and logistics, could have severe repercussions for the U.S. agricultural sector.
The American Farm Bureau Federation’s Market Intel report suggests that "bulk agricultural exporters could face an additional $372 million to $930 million in annual transportation costs." This translates to an increased cost of 9.5 to 27.8 cents per bushel of soybeans, eroding profit margins in a highly competitive global market.
AFBF President Zippy Duvall expressed concerns, stating, "Unfortunately, farmers may feel the brunt of increased costs in exporting their goods. They’ve lost money on almost all major crops for the past three years. Higher freight rates could make things even worse by reducing their competitiveness overseas."
The USTR also plans to implement minimum requirements for shipping on U.S.-flagged, operated, and built vessels. With China controlling over 5,500 commercial vessels compared to around 100 for the United States, increasing the American fleet poses significant challenges due to fewer U.S. shipyards and longer construction times.
Public comments on these proposed actions are due by March 24. Farmers and stakeholders are urged to participate in the discussion to potentially mitigate these financially burdensome measures.
Photo Credit: american-farm-bureau-federation
Categories: National