December 12, 2019
NDAA and Tariff Alert
WASHINGTON, D.C. – As we enter the Holiday Season, AAPA is deeply involved in efforts to bring good news and cheer for the maritime industry. AAPA is nearing a major Federal grant program win; the Trump administration must decide whether to ratchet up tariffs; Congress is ready to finalize North American trade legislation.
Competitive Grants for Ports Becoming Law
By the end of this week, both the House and Senate will likely have passed the National Defense Authorization Act (NDAA) for Fiscal Year 2020. AAPA has been working with members of the House and Senate and Committee staff on an important provision included in this bill – the Ports Improvement Act. A similar version of which was introduced last year by Senators Roger Wicker (R-MS) and Tammy Baldwin (D-WI) as S. 1417.
Once signed into law, this proposal will replace the current Port Infrastructure Development Program (PIDP) with a Port and Intermodal Improvement Program. This new law is written to codify many provisions under which the PIDP was operating and is authorized for $500 million. The Ports Improvement Act included in the NDAA calls for competitive grants to be made available to “assist in funding…projects for the purpose of improving the safety, efficiency, or reliability of the movement of goods through ports and intermodal connections to ports,” consistent with the Maritime Administration’s (MARAD) PIDP grant solicitation earlier this year. While there are limits on grant allocations the federal cost-share is authorized up to 80%, with rural areas being eligible for increased federal contributions.
By codifying much of what the MARAD was doing in the awarding and evaluation of Port Infrastructure Development Grants and by authorizing significant sums for a similar program, Congress has indicated that continued public investment in our nation’s ports remains a priority.
China Tariffs Loom on Big-Ticket Consumer Items
Barring a decision to delay the tariffs, Sunday, December 15, will mark the day that nearly all bilateral trade between the U.S. and China gets taxed. The United States Trade Representative will impose a 15% import tax on $50 - $100 billion of goods from China including big-ticket consumer items such as video monitors, cell phones, laptops, video game consoles, specific toys, footwear, and clothing.
In previous rounds of China tariffs, AAPA and its members were successful in protecting large port equipment from taxes. These protected items include gantry cranes, overhead traveling cranes on a fixed support, mobile lifting frames on tires and straddle carriers, transporter cranes, bridge cranes, and tower cranes.
If the December 15 tariffs take effect, nearly 80% of bilateral trade will have become affected over the course of the trade dispute. AAPA encourages members to contact Cary Davis they become aware of critical port operations items that may be affected going forward.
While the crane equipment will, fortunately, remain exempt from tariffs, the imposition of a large tax on consumer items in the middle of the shopping season would damage commerce and rattle confidence.
Therefore, AAPA and its partners in Americans for Free Trade sent a letter to President Trump strongly encouraging the administration to suspend implementation of the Tranche 4B tariffs set to take effect on December 15.
Call to Action: AAPA encourages its members and partners to read and forward the letter to Federal policymakers to voice the potential impact on transport, distribution, and logistics.
USMCA Deal Finalized, Awaits Congressional Ratification
As though they were presenting a holiday gift, negotiators in the U.S., Canada, and Mexico have announced a final agreement on the trade deal. It must now be ratified by the U.S. Congress under ‘fast track’ procedures. The deal modernizes and addresses tariff schedules, commodity regulation, goods standards, manufacturing regional content requirements, digital trade, and labor standards. Ratification of the agreement is crucial for the continued growth of goods flow in the North American bloc. Ports stand to benefit significantly from the increase in trade and the certainty USMCA will provide for the flow of trade and travelers.
The House of Representatives is expected to vote on the agreement this month, and the Senate will take up the legislation in January.
Call to Action: AAPA encourages its members to contact their members of Congress in support of the modernized trade deal.
