On May 19, the U.S. Department of Justice announced the indictment of four Chinese manufacturers of steel shipping containers and six of their executives for violations of antitrust law. Between 2019 and 2024, the indictment alleges, the companies and their executives conspired to limit container production and fix prices. Their conspiracy, the government contends, “affected domestic competition for imported goods in the United States by fixing a component of global shipping costs—that is, the price of standard dry shipping containers—paid by United States importers.”
On June 18, after the U.S. International Trade Commission determined that U.S. manufacturers of chassis, the steel frames on which trucks haul shipping containers, have been injured by cheap imports, the Department of Commerce imposed duties reaching 109 percent on chassis from Mexico and even more on chassis from Thailand and Vietnam. The new duties will increase the price of chassis, including those used to transport containers filled with imports.
In other words, the Trump Administration is blaming Chinese companies for raising the cost of importing goods in shipping containers even as its own actions raise the cost of importing goods in shipping containers.
If this leaves you scratching your head, remember that containers and the chassis on which they ride have one thing in common. Both are made largely of steel—a product that federal policy has made extraordinarily expensive in the United States.
The underlying problem is that U.S. steel mills, for the most part, are not cost-competitive with large mills abroad. Some of their disadvantage has to do with poor productivity: output per worker at U.S. steel mills has tumbled since 2018. In addition, foreign governments’ subsidies to steelmakers are often more generous than those in the United States, allowing foreign mills to export steel at prices that would otherwise be unprofitable.
Rather than countering foreign subsidies with domestic subsidies that would weigh on the federal budget, Washington has chosen to support the steel industry by taxing its customers. It has done this since 1969 by forcing up domestic steel prices in a variety of ways. At present, tariffs add 50 percent to the cost of most imported steel products, with some imports facing much higher rates.
Protection for steelmakers is punishment for industries that use steel. Thanks to import barriers, steel sells in the United States for nearly three times as much as in China and at least one-and-a-half times as much as in Brazil, South Korea, or Europe. That is one reason production of containers and chassis migrated out of the United States in the first place.
Making containers cheaper and chassis more expensive probably won’t have much effect on import prices; each of the eight thousand pairs of shoes filling a standard forty-foot container will probably cost just a few cents more to transport. This policy confusion, though, should give pause to the increasingly loud advocates of industrial policy. There are valid national security reasons to preserve a domestic steel industry, or at least a North American one. But the way to fight the Chinese container cartel and artificially cheap imported chassis is to keep the domestic price of steel low rather than forcing it up. As long as the United States has the world’s most expensive steel, relying on imported containers and chassis to transport our foreign trade makes perfect sense.