Perez: Imposing a $1.5 million port of entry fee on Chinese vessels will hurt my company and the Port of Brownsville

HOUSTON, Texas – Juan Luis Perez is president of CAL-IXA Aggregates, a company that imports aggregates through the Port of Brownsville and is also involved in logistics.

Perez attended RioPlex’s Texas Port to the Stars Foreign Direct Investment Summit, held recently at the Westin Galleria in Houston. During the Q&A session, Perez, sitting in the audience, asked a couple of questions of a representative from the Texas Governor’s Office. One of Perez’s concerns was the impact proposed tariffs on Chinese ships could have on his business and that of the Port of Brownsville.

The Rio Grande Guardian International News Service interviewed Perez afterwards about those questions. Here is a video recording of the interview:

Story continued:

Asked about his concerns over tariffs, Perez said:

“President Trump is trying to impose a tariff for Chinese-built ships of $1.5 million dollars to come into the United States, any port in the United States,” Perez said. “That has not been talked about very much but that’s creating a lot of confusion in the market and even a lot of the ship owners are trying to avoid coming into the United States until that is [resolved].”

Chinese-built ships account for 60 to 70 percent of the total fleet of bulk carriers in the world, Perez said.

“Every time that a Chinese-built ship comes into [the] United States, at least that’s the idea from Mr. Trump… (the idea) is to charge that $1.5 million dollars or so,” he added. “The fleet of the large ships (50,000 tons or more), those ships are mainly being done in Korea, China, and Japan.”

Perez said some of the products his company imports come into the Port of Brownsville and are then moved by rail to Monterrey, Mexico.  The ships bringing the product in are oftentimes large ships of 50,000 tons or more and mainly Chinese-built, he explained.

An example Perez gave is steel coming from Brazil to Brownsville on a Chinese-built ship. If a tariff of $1.5 million is charged on that ship, because it is Chinese, it will impact the price of the products being imported.

“If you put it in tons, that’s $30 to add to the product and that’s hard. That is the same with cement, that is the same with other types of steel, and even with grains that go into Mexico that might come through Brownsville,” he said.

Today, Perez said, one of the most important products brought into the Port of Brownsville is steel. Some of the steel gets sent to the foundries in Monterrey.

It was put to Perez that companies in Monterrey could bypass the tariffs by simply importing their products from a Mexican port, because Mexico is not imposing. $1.5 million entry fee for Chinese ships. Perez said that was quite possible. He said that would not only hurt his company but the Port of Brownsville in general.

Perez said he supports President Trump’s idea of bringing manufacturing back to the U.S. However, he said that in the case of shipbuilding, that could take a decade to achieve.

“The idea is for the US to build those bulk carriers. However, the infrastructure is not in place for this to happen. It would take between five and ten years to make this happen. Also, the cost of building these types of ships in the US might be five to six more times than in China, Korea, or Japan,” Perez said. 

The post Perez: Imposing a $1.5 million port of entry fee on Chinese vessels will hurt my company and the Port of Brownsville appeared first on Rio Grande Guardian.