Source: United States House of Representatives – Congressman Dan Newhouse (4th District of Washington)
Headline: Newhouse Introduces Legislation Strengthening U.S. Seaports
WASHINGTON, D.C. – Today, Rep. Dan Newhouse (WA-04) introduced legislation to close a loophole exploited by foreign shippers who circumvent United States seaports and divert cargo to ports in Canada and Mexico to avoid paying the U.S. harbor maintenance tax (HMT).
“We have an opportunity to expand the United States’ position as a leader in global trade, and we can only achieve that by strengthening and modernizing our port infrastructure.” said Rep. Newhouse. “Foreign shippers have been circumventing U.S. seaports, especially on the west coast, in order to avoid paying the harbor maintenance tax, resulting in a depleted maintenance fund. My legislation eliminates this costly loophole, ensures foreign shippers are paying their fair share, and strengthens our seaport infrastructure to deliver goods to consumers more efficiently.”
The legislation is supported by the Northwest Seaport Alliance and SSA Marine.
Toshiko Hasegawa, Northwest Seaport Alliance Co-Chair and Port of Seattle Commission President, said, “For decades, the Harbor Maintenance Tax has created a competitive disadvantage for U.S. ports like Seattle and Tacoma to other ports in North America. We are deeply grateful for Congressman Newhouse’s leadership in championing this issue and introducing this legislation to level the playing field by eliminating the incentive to divert U.S.-bound cargo through non-U.S. ports.”
John McCarthy, Northwest Seaport Alliance Co-Chair and Port of Tacoma Commission President, said, “Washington is one of the most trade-dependent states in the nation, and maintaining the NWSA’s position as a competitive, top-tier cargo gateway is critical to providing market access to agricultural producers. We thank Congressman Newhouse for working to uphold a strong, competitive supply chain by ensuring taxes are applied fairly to all US-bound cargo regardless of port of entry.”
Uffe Ostergaard, CEO of Carrix, said, “For over 30 years, Pacific Northwest ports have been disadvantaged by the Harbor Maintenance Tax, which has made these U.S. ports less competitive and has driven cargo volumes to alternative gateways. We are grateful to Congressman Newhouse for his leadership on this critical legislation to provide a more level playing field, support U.S. jobs, and bolster key export communities in Washington State.”
The fee would be 0.125% of the value, equal to the HMT, of U.S.-bound cargo that is discharged from an ocean-going vessel in Canada or Mexico and subsequently enters the U.S.
The HMT is an ad valorem tax that funds Army Corps of Engineers (USACE) activities to maintain U.S. seaports. U.S.-bound cargo from overseas trading partners that arrives at Canadian or Mexican ports and then enters the U.S. is not subject to paying the HMT.
The U.S. Harbor Maintenance Trust Fund lost nearly $600 million in revenue over the last ten years due to the $466 billion in imports that avoided the HMT by moving through a Canadian or Mexican seaport before entering the U.S.
Bringing these circumvented imports back to U.S. ports is critical for USACE’s duty to keep America’s harbors and rivers maintained and support economic growth.
Earlier this year, the Congressman visited the Port of Seattle and saw firsthand the impact circumvented cargo has on port operations.
See full bill text here.
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