Biden government will not cancel tariffs, experts say it can ease supply chain bottlenecks

Experts say that the Biden administration can alleviate the supply chain crisis by removing the huge tariffs imposed on relatively humble trucking equipment imported from China, but so far, the government has refused to make concessions.

In May, the Ministry of Commerce imposed a 221% tariff on Chinese truck chassis, a special trailer used to transport containers on roads. Truck drivers use chassis to transport containers full of various consumer goods to ports, railway yards and shops.

The tariff is on top of the 25% tariff imposed by the Trump administration on chassis from China, the world’s largest manufacturer. Together, the tariffs have increased the price of the chassis, which used to cost approximately US$12,000, by approximately US$25,000.

At the time, the U.S. Department of Commerce stated that the move was necessary because American chassis manufacturers were destroyed by cheaper Chinese imports, resulting in hundreds of workers being laid off.

But the tariffs have also created a shortage of chassis and hindered the ability of truck drivers to transport mountains of cargo in US ports. According to the latest data from Pool of Pools, an organization that tracks chassis movement, chassis removals from the ports of Los Angeles and Long Beach fell by 23% between April and September.

“This is a 220% tariff on a very important part of the supply network. Just removing the tariff can quickly produce huge benefits,” said Ryan Young, a senior researcher at the Competitive Enterprise Institute, a liberal think tank. , Said in a recent webinar. “This is bad news for the entire supply network.”

The White House did not respond to multiple requests for comment. In an article on the White House’s official blog last week, the government stated that the ports of Los Angeles and Long Beach had cleared 60,000 chassis and pledged to remove another 28,000.

In October, the American Chassis Manufacturers Union urged President Biden to resist pressure to remove tariffs. They said the tariffs enabled them to hire hundreds of new workers and increase their production capacity by 400%.

In a letter to Mr. Biden, the organization described the call for tariff removal as a “smoke screen”, which was “misleading, wrong, and should be rejected.”

“Solution [supply chain] The problem is not with American manufacturers and their workers,” the organization wrote. “Sadly, removing tariffs will only cause more American workers to lose their jobs, and will not solve the root cause of supply chain problems. “

The organization said: “This is not a solution at all, and it will only harm American manufacturers and their workers who have suffered major material injuries due to unfairly traded Chinese chassis.”

But even the expansion of production can not produce enough chassis to meet current demand, and this has been three months behind.

The shortage of port labor has exacerbated the shortage of chassis, causing hundreds of thousands of chassis across the country to be idled in ports. As workers struggle to clear the backlog, these chassis are used to place empty containers in the port.

Matt Schlapp, CEO of the Port Trucking Association, which represents Southern California port truck drivers, estimates that there are at least 110,000 empty containers on the chassis of the ports of Los Angeles and Long Beach.

“From our perspective, this is a utilization issue,” he told the Washington Times. “We are limiting the supply of enclosures, but we are not maximizing the use of enclosures effectively. We are stuck in a storage problem.”

The shortage has also increased the cost of truck drivers, who are already dealing with higher gasoline prices and inflation. Most truck drivers rent the chassis from the equipment supplier and return it at the end, paying for the expiration date.

Mr. Schrapp pointed out that some truck drivers used to wait 40 minutes to open the chassis, but now they have waited as long as 7 hours.

“Unless we move the goods, we won’t get paid,” Mr. Schrapp said. “But if you enter the currently very crowded shipping terminal, you will spend a lot of time waiting. The chassis will make a difference because this is how you move your containers.”

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