Citing a letter the company wrote to government officials in late July, Bloomberg reported that the Boring Co. wants an exclusion from tariffs for parts including cutterheads. In May it asked that components for tunneling machinery be removed from the laundry list of products the White House was targeting in its trade war with China but was unsuccessful in its request. (See also: The Basics of Tariffs and Trade Barriers.)
In July, President Donald Trump imposed tariffs on $43 billion worth of Chinese products coming into the U.S. in retaliation for what the White House said was intellectual property thefts and unfair trade practices. It has vowed to slap tariffs on an additional $16 billion worth of Chinese goods on Aug. 23, reported Bloomberg. If China engages in any retaliatory actions, Trump has warned he could place levies on all of the $500 billion worth of products imported from China to the U.S.
Boring Co. Can Only Get Certain Parts In China
According to the letter, Bloomberg reported that while Boring Co. said the tunneling machines are available outside China, certain parts are only “readily available” from the country. The company said it’s working to develop and manufacture its own boring machines, but while it’s working on that it has had a tough time purchasing all the components necessary for the machinery in the U.S. As a result, it has to import them for a “small number” of machines.
Tariffs Could Delay East Coast Tunnel
Ashley Steinberg, regulatory counsel for the Boring Co., wrote in the letter that more tariffs on components and the inability to get parts from China will result in a delay or one or two years for the proposed tunnel that would run from Washington to Maryland with plans to expand to New York.
The Boring Co. also this week announced a proposal to construct a tunnel connecting the eastside of Los Angeles to Dodger Stadium. In June, it emerged as the winner, securing the necessary permission to build a high-speed express train to Chicago's O'Hare Airport. It involves designing, building, financing, operating and maintaining the system through a public-private agreement with the city. It is expected to cut down the travel time from the airport to the city to between 12 and 20 minutes. (See also: Musk's Boring Co to Build Chicago Airport Train.)
Steinberg also said in the letter the tariffs could results in job losses in tunnel machine fabrication and tunnel construction, reported Bloomberg. Bloomberg noted that the U.S. Office of Trade Representative is accepting requests for one-year exclusions from the Chinese tariffs through Oct. 9.