MICHEL MARTIN, HOST:
We were wondering how President Trump's tariff program is affecting the ports themselves, so we asked Cary Davis to help us out. He's president and CEO of the American Association of Port Authorities, and he was nice enough to come by our studios. Welcome. Thanks for joining us.
CARY DAVIS: Good morning, Michel. It's great to be here in the studio with you.
MARTIN: So what are you hearing from ports around the country about how they're planning for higher tariffs in terms of how much business you're going to do and also how you're going to have to adapt to the new rules?
DAVIS: Just like your prior guest was talking about the volatility and unpredictability at the land borders, well, multiply that by two or three X in terms of our maritime borders and our seaports. We have a lot more volumes of cargo, freight, cars, materials coming through our seaports and even our land borders. And the whipsaw effect that's happening with the unpredictability of tariffs makes it really hard to plan for exactly how much freight volumes will be coming through the ports.
MARTIN: And also the fact that the - Trump's done away with those rules about giving breaks to certain packages, packages below $800. So I'm guessing just a lot more packages.
DAVIS: Yeah. Similar to the guest that you had on before, there's a lack of resources for the Customs and Border Protection agents and tools that they use to figure out whether something is subject to a tax and how to apply it. So, yes, we can expect a lot more tariffs to be applied to the items that are coming through the ports.
MARTIN: And are there some of the trade deals that give you particular concern?
DAVIS: Quite the opposite. I'm biased because trade is good for everyone, especially a trade-dominant economy such as the United States that has a middle class, which is - I do all of my shopping at Walmart, for example. So trade expansion is great, and the lowering of trade barriers is great. But when it happens in a piecemeal way, it's kind of unpredictable. Moreover, Michel, there's a specific set of equipment that we use at our seaports, which have been subject to tariffs as well.
MARTIN: I was going to ask about that, that some of the tariffs affect the equipment the ports themselves use. Say more about that.
DAVIS: Yeah, so these are the large cranes that you see dotting the skyline at any large seaport gateway. And admittedly, many of these equipment are sourced from China. About - China has about 80% market share in these large ship-to-shore cranes. We'd love to reassure the manufacturer of these equipment in the United States. In fact, Congress agrees. They introduced a bill just last week, the Port Crane Tax Credit Act, to help incentivize manufacture of these large cranes in the United States. But there's a lead time. There's a ramp-up time. So in the meantime, we need to continue sourcing these cranes from China, Austria, Ireland, Korea until we're able to manufacture these cranes here in the United States.
MARTIN: OK, so just to clarify this, though. You talked about how you're pro-trade. I get that. But this is not lowering trade barriers. This is raising trade barriers, isn't it?
DAVIS: Well, in...
MARTIN: I guess the main question I have is, how is this going to affect the average American consumer?
DAVIS: Trade volumes are remarkably persistent. President Trump cares deeply about fairness. This is a word he uses a lot when talking about trade policy. So he's honed into something, which is that, regardless of what the tariff rates are between countries, a lot of countries will use nontariff barriers to prevent U.S. exports from going from here to there. So by negotiating trade deals that require other countries to purchase U.S. goods, it's actually bringing down those nontariff barriers in addition to the tariff barriers.
MARTIN: And the impact on the consumer is what?
DAVIS: American goods will have more access to markets abroad, whether...
MARTIN: OK
DAVIS: ...It's China, Japan, Africa, Europe. American exporters will have more opportunities to sell abroad.
MARTIN: All right. That's Cary Davis, president and CEO of the American Association of Port Authorities. Cary Davis, thanks so much for stopping by.
DAVIS: Thank you, Michel.
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