Peter Friedmann’s View From Washington DC - May 2024

This is a pivotal moment in international transportation and trade. Every four years as the Presidential and Congressional election year builds steam, we are assaulted by protectionist rhetoric. Already the two leading candidates, Biden and Trump, are competing to show who is the most protectionist, the most anti-trade. One threatens an across the board 10% duty increase on all imports, on top of existing duties, and that’s just to start. The other has a list of imports that he wants to hit with big duties – steel, aluminum, and how about a fee on many, even most cargo ships amounting to $50 per ocean container? As a side note, demonstrating the extent that campaigns can change candidates’ most fundamental beliefs, it is shocking, considering their positions not 12 months ago, our Presidential candidates are also competing to show who is tougher on illegal immigration, or pro-choice on abortion.

While those are not going to be issues debated on Capitol Hill before the elections, trade and transportation certainly are. Will Congress jump on the protectionist bandwagon? Is the effort to end, restrict or limit deminimis entries partly motivated by protectionist ambitions? Is protectionism a reason for Congress’ continuing difficulty renewing what was once a non-controversial quite limited helping-hand for less developed countries – GSP. Who is opposing the President’s proposed steel duties, the extruded aluminum duties? No one, not a Democrat, not a Republican. Over this summer as the elections near, more protectionist proposals will arrive on the Capitol Hill and White House doorsteps, count on it. It’s scant solace to know that the protectionism is very much bipartisan.

Meanwhile, the new Ocean Shipping Reform Act will impact every item that is imported into or exported out of this country - beginning May 29th! The new regulatory environment might lead to a more efficient supply chain at some point, there will be a period of adjustment. And Congress may be asked by industry and even the FMC for legislative clarification of certain OSRA policies. But adapting to the new shipping regulatory regime will be the least of our worries, if the ILA were to carry out the threatened strike and shutdown of all US ports from Maine to Texas.

Now we come full circle, in this election year. Politics can lead to bad trade policy and decisions, but politics can also keep trade going. Politics will motivate the President to prevent a coastwide longshore labor dispute that shuts down our trade and our economy just months before the November 5 election.

But history shows they will come to their senses; after the elections, the longer-term perspective can prevail, and “bright ideas” sought by special interest groups, go back on the shelf…for four years. Or so we hope.

Peter Friedmann OurManInDC@FederalRelation.com