As I've advocated before, the response should always be asymmetrical whenever possible. The US is attempting to leverage its status as the largest import market to achieve its goals whether it's with port fees or tariffa, with the cost of undermining its status as the largest import market (raising costs, depressing demand). China can retaliate in kind as some have suggested, e.g. levying port call fees for Korean/Japanese ship. Some have suggested somewhat asymmetrical response e.g. airport landing fees for Boeing aircrafts. However, I think these are not the best options, as all of them can hurt China's interactions with the ROW, causing diplomatic frictions as well as reducing China's status and leverage as the largest export market.
IMO the best asymmetrical response is always to go with the flow. In boxing when the opponent throws a flurry of punches, the best response isn't necessarily to throw a flurry of punches back. What I think China should do is to continue improve relations with SK and Japan, and aggressively integrate China into their shipbuilding supply chain. For example, the IMO is forging ahead with ship emissions restrictions with the goal of net neutral by I think 2050 in a recent meeting. A meeting BTW the US did not attend due to recent budget cuts not covering for travel expenses.
China can take advantage of this by continue to aggressively invest in methanol, ammonia, etc. as well as powertrains. It can then offer them to SK/Japan. Take stakes in their shipbuilders (SK may be an easier target here as the Chaebols can be enticed more easily) and their suppliers down to basic materials like steel whenever possible.
SK and Japan are currently capacity constrained. To meet future demands they need more labor which China already supplies a lot of, more capital in a world not in a mood to invest except for China, and tech which the US is shunning but China is investing in. When the US sanctioned Huawei many suggested targeting Apple or Tesla. Yet the Chinese government went with the flow and used the domestication imperative driven by sanctions to supercharge the construction of the domestic semiconductor industry. Wouldn't it be ironic if port call fees designed to weaken the Chinese shipbuilding industry in favor of SK/Japan instead made SK/Japan unable to build ships without China? Rather than leveraging China's status as the largest export market to counterpunch and as a result reducing China's status as the largest export market (or at least reduce its growth), it would leverage China's labor, capital, and tech in addition to the port fees to strengthen China's position in the shipbuilding industry, all the while not causing any harm to China's interests via China's own actions, unlike the American ones.
After some initial turbulence, things will settle down. China trades far more than the US, China runs some of the largest shipping companies, and as someone who has already calculated, the port fees aren't that much (especially when compared to the >$10k per container markup during the COVID days). Over the medium term the impact on China's shipbuilding industry will be limited, especially when including workarounds (transshipping to sidestep the fees, shared cost between alliance partners, etc.). Over the longer term trade barrier uncertainty (tariffs, port fees, sanctions, etc.) will serve to isolate American trade with the ROW, further mitigating the impact. In the grander scheme of things, actions designed to hurt the opponent are weaker in general than actions designed to uplift oneself. Like China's response toward tech sanctions, the actions taken against the port fees should look first and foremost into how it can be used to uplift China rather than hurting the US while only throw punches judicially. Flow like the water and sting like a bee.
IMO the best asymmetrical response is always to go with the flow. In boxing when the opponent throws a flurry of punches, the best response isn't necessarily to throw a flurry of punches back. What I think China should do is to continue improve relations with SK and Japan, and aggressively integrate China into their shipbuilding supply chain. For example, the IMO is forging ahead with ship emissions restrictions with the goal of net neutral by I think 2050 in a recent meeting. A meeting BTW the US did not attend due to recent budget cuts not covering for travel expenses.
China can take advantage of this by continue to aggressively invest in methanol, ammonia, etc. as well as powertrains. It can then offer them to SK/Japan. Take stakes in their shipbuilders (SK may be an easier target here as the Chaebols can be enticed more easily) and their suppliers down to basic materials like steel whenever possible.SK and Japan are currently capacity constrained. To meet future demands they need more labor which China already supplies a lot of, more capital in a world not in a mood to invest except for China, and tech which the US is shunning but China is investing in. When the US sanctioned Huawei many suggested targeting Apple or Tesla. Yet the Chinese government went with the flow and used the domestication imperative driven by sanctions to supercharge the construction of the domestic semiconductor industry. Wouldn't it be ironic if port call fees designed to weaken the Chinese shipbuilding industry in favor of SK/Japan instead made SK/Japan unable to build ships without China? Rather than leveraging China's status as the largest export market to counterpunch and as a result reducing China's status as the largest export market (or at least reduce its growth), it would leverage China's labor, capital, and tech in addition to the port fees to strengthen China's position in the shipbuilding industry, all the while not causing any harm to China's interests via China's own actions, unlike the American ones.
After some initial turbulence, things will settle down. China trades far more than the US, China runs some of the largest shipping companies, and as someone who has already calculated, the port fees aren't that much (especially when compared to the >$10k per container markup during the COVID days). Over the medium term the impact on China's shipbuilding industry will be limited, especially when including workarounds (transshipping to sidestep the fees, shared cost between alliance partners, etc.). Over the longer term trade barrier uncertainty (tariffs, port fees, sanctions, etc.) will serve to isolate American trade with the ROW, further mitigating the impact. In the grander scheme of things, actions designed to hurt the opponent are weaker in general than actions designed to uplift oneself. Like China's response toward tech sanctions, the actions taken against the port fees should look first and foremost into how it can be used to uplift China rather than hurting the US while only throw punches judicially. Flow like the water and sting like a bee.
