Port of Virginia CEO testifies about potential impacts of tariffs on cranes

Virginia Port Authority CEO and Executive Director John Reinhart told the U.S. Trade Representative last week that proposed tariffs on Chinese-made cranes could potentially slow a terminal expansion project.

Four ship-to-shore cranes are part of the port’s expansion project at the Virginia International Gateway marine terminal in Portsmouth. The Trump administration is currently considering additional tariffs on more than 6,000 Chinese-made products. Under the proposals, the Chinese-made cranes could be subject to a 10 or 25 percent duty.

“In August of 2017, our Board of Commissioners approved spending $40.9 million to cover the cost of the cranes, parts, their delivery to Virginia from China and installation at our Virginia International Gateway terminal – well before tariffs of this nature were being contemplated,” Reinhart said in testimony before U.S. Trade Representative Robert Lighthizer.

Reinhart pointed out the cranes do not address China’s violations of intellectual property. Instead, the cranes are low-tech. A Virginia-based company is supplying the technology drives that will control the cranes.

The port is purchasing the cranes from Shanghai Zenhua Heavy Industries Co. Ltd. It is one of only three manufacturers of this crane in the world, Reinhart said. None are based in the U.S.

The cranes are scheduled for delivery in early 2019.

In his testimony, Reinhart described the port’s $700 million expansion projects at Virginia International Gateway and Norfolk International Terminals. Together, the projects will increase capacity of the port by 40 percent. “Inclusion of gantry cranes on the product list subject to tariffs poses a direct threat to this major infrastructure project, which the nation can ill afford,” Reinhart said. “It is the speed to market and flow of cargo that keeps our economy, statewide and nationally, healthy and growing.”