【By Observer Network, Xiong Chaoyi】According to a Reuters report on April 9, Asian buyers are reducing purchases of US agricultural products due to the US plan to impose high "service fees" on ships docking at its ports and impose tariffs on major trading partners. These policies are increasing market uncertainty and leading to a decline in demand for US agricultural products.
The report noted that China is the largest importer of US agricultural products, while other Asian countries such as Japan, South Korea, and Thailand also purchase large amounts of wheat, corn, and soybean meal from the US. Due to the Trump administration's plan to charge up to $1.5 million under the pretext of "revitalizing the shipbuilding industry," forcing exporters to switch to non-Chinese vessels, this has driven up shipping costs, further weakening demand for US agricultural products.
Jay O'Neil, a freight consultant from Kansas, said bluntly: "This has made US ports unattractive to over half of the global fleet." He stated that shipping companies are unwilling to provide quotations for US routes from April to June due to the upcoming fee policy.
Traders revealed that a shortage of shipping capacity and trade war uncertainties are affecting procurement, with US grains now largely excluded from the procurement lists of Asian buyers. A senior official from a US soybean organization disclosed that due to the proposed "service fee" policy, a well-known US exporter could not obtain soybean meal transportation quotes from shipping companies, indicating that "the impact has already become apparent."
Additionally, according to a Reuters report on April 8 citing six sources, given the opposition from multiple US industries, US President Trump is considering easing the fee plan. The White House and the Office of the US Trade Representative have yet to comment on related reports. However, it is worth noting that US Trade Representative Jameson Greer stated during a Senate Finance Committee hearing that not all proposals to charge Chinese-made ships will be implemented.
Photo: Soybeans loaded into trucks from combines in Fairfield, Ohio. IC Photo
Reports indicate that traders said the shipping deadlock and trade war uncertainties may put pressure on Chicago benchmark soybean and wheat futures, with both futures' trading prices nearing their lowest levels in months.
A Singapore-based trader from a multinational company selling US grains and oilseeds in Asia said: "So far, most importers are reluctant to take risks importing from the US. Transportation costs have increased, and there is too much uncertainty in the trade war."
Reuters pointed out that about 35% of global wheat and corn buyers come from Asia. Specifically regarding soybeans, China accounts for more than 60% of global transactions.
Traders believe that although other Asian grain-importing countries are not expected to retaliate against US tariffs, a shortage of shipping capacity and trade war uncertainties are affecting procurement.
"We are trying to replace ships for previously ordered Southeast Asian wheat orders, having to pay higher freight rates to find non-Chinese cargo ships. For now, US grains are basically excluded from the procurement lists of Asian buyers," another Singapore-based trader said.
Reuters reported that traditional US wheat buyers like Japan and South Korea are expected to continue purchasing US goods but may turn to suppliers in South America and the Black Sea region for some corn and soybeans. The trader said: "Current procurement of US agricultural products is almost at a standstill. In the long term, based on purchasing commitments, Japan and South Korea should maintain US wheat imports."
Since US wheat is mainly used for direct consumption, buyers like Japan and South Korea find it difficult to easily change suppliers. However, feed grains (such as corn and soybeans) can seek alternative channels. The trader disclosed that most Southeast Asian grain importers have not booked half of their May demand, making them vulnerable to supply shortages.
"You have already seen the impact," Mike Steenhoek, executive director of the US Soybean Transportation Alliance, said. He noted that due to the proposed policy of charging fees for China-related vessels, a well-known US exporter could not obtain soybean meal transportation quotes from shipping companies.
April 8, Long Beach Port Container Terminal, California. Visual China
In late February, the Office of the US Trade Representative (USTR) devised a "dirty trick," announcing plans to impose a so-called "additional service fee" of up to $1.5 million per visit on ships entering US ports. According to maritime experts cited by Reuters, if a ship is manufactured in China, operated by a Chinese shipping company, and the company has also ordered ships from Chinese shipyards, the cumulative fee for each docking could reach up to $3.5 million.
The World Shipping Council, which represents international ocean shipping, warned that an estimated 98% of ships globally would be charged fees when docking at US ports, as these fees apply not only to existing Chinese-made ships but also to future ones, as well as any carriers that have ordered at least one Chinese-made ship. Currently, 90% of global ships need to pay this fee.
The Trump administration's fee plan quickly drew opposition from multiple US industries. At a public hearing held on March 24, representatives from various US industries, including coal and agriculture, emphasized that Chinese-related ships are prevalent in the global fleet, and it is impossible to replace these ships in the short term. The "docking fee" will disrupt the transport of nearly all goods.
Mike Koehne, a member of the American Soybean Association, pointed out that lower prices are an advantage for US soybeans in the global market, with China being one of the main buyers of US soybeans. Additional port fees will expose US farmers to "unintended consequences."
At the same time, many industry experts said that Trump's move is unlikely to revitalize the US shipping industry. Albert Venstra, a professor of trade and logistics at Erasmus University Rotterdam, said this was a "strange idea," as the biggest impact of the rise of China's shipbuilding industry is on Japan and South Korea. Data shows that the combined market share of Japan and South Korea in the shipbuilding industry fell from 65% a decade ago to 45%.
Regarding the US proposal to charge "docking fees," Foreign Ministry spokesperson Mao Ning previously stated that levying port fees and imposing tariffs on handling equipment damages others while harming oneself, driving up global shipping costs, disrupting the stability of global production and supply chains, increasing domestic inflationary pressures in the US, harming US consumers and businesses, and ultimately failing to revitalize the US shipbuilding industry. We urge the US to respect facts and multilateral rules and immediately stop erroneous practices. China will take necessary measures to defend its legitimate rights and interests.
This article is an exclusive contribution by Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7491273315345121818/
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