Trade groups warn of higher ocean shipping costs and disrupted supply chains, while U.S. officials argue the policy aims to strengthen domestic shipbuilding and enhance economic security.
As early as mid-October, many China-linked vessels arriving at U.S. ports could face a new fee structure, according to an announcement by the Office of the U.S. Trade Representative (USTR) on Thursday.
The policy targets ships built in China or operated by entities with ties to the country, imposing fees ranging from $18 per net ton to $120 per container. These charges, effective October 14, will escalate annually every April. Exceptions will be granted to vessels transporting U.S. government cargo.
Background and Context
The decision follows a year-long Section 301 investigation into China's influence in the logistics, maritime, and shipbuilding sectors. The USTR’s action revises an earlier proposal after receiving nearly 600 public comments and delaying implementation to address concerns. Despite adjustments, the agency deemed the new measures essential to protect U.S. interests.
“These actions balance the need for intervention with the importance of minimizing disruptions for U.S. exporters,” the USTR noted in a press release.
The fee structure also aligns with a recent executive order designed to bolster the U.S. shipbuilding industry. Shipowners can secure exemptions from the fees for up to three years by ordering U.S.-built vessels, further incentivizing domestic production.
“Shipping is critical to America’s economic security and the free flow of commerce,” said Ambassador Jamieson Greer, the U.S. Trade Representative. “This administration’s actions will reduce Chinese dominance, strengthen U.S. supply chains, and stimulate demand for American-built ships.”
Industry Concerns and Potential Impact
Trade groups representing importers have expressed concern that the fees will increase shipping costs and strain already fragile supply chains.
“When ocean carriers raise rates, American families bear the burden through higher costs and product shortages,” said Nate Herman, Senior Vice President of Policy at the American Apparel & Footwear Association. “We fully support strengthening the U.S. maritime industry, but penalizing shippers for not using American-built vessels—which cost up to five times more and are in limited supply—is counterproductive.”
Maritime analysts anticipate significant adjustments to carrier networks.
“This will likely lead to a reshuffling of networks within the Ocean Alliance, with carriers like CMA CGM and Evergreen prioritizing U.S.-bound services,” Lars Jensen, CEO of Vespucci Maritime, wrote in a LinkedIn post. He noted that Chinese carriers like COSCO Shipping and OOCL would be among the hardest hit, potentially facing fees of up to $8.4 million for their larger ships under the policy.
However, the policy’s reach extends beyond Chinese-owned carriers. China-built vessels constituted 19% of the ships arriving at U.S. ports in February, according to Alphaliner’s analysis of 1,002 port calls. Non-China-based companies utilizing China-built ships will also feel the effects.
Broader Trade and Tariff Strategy
The U.S. government’s new policy fits within a broader trade strategy, which has increasingly relied on tariffs and restrictions to curb Chinese influence.
Since January, the administration has invoked emergency powers to enforce tariffs, including a 145% minimum tariff on numerous Chinese goods and a 25% tariff on foreign-built automobiles. The USTR’s new measures extend this strategy by targeting logistics equipment and vessels, along with proposing additional restrictions on key industries.
Highlights of the new measures include:
Tariffs on logistics equipment: Pending public feedback, tariffs on containers, chassis, chassis parts, and ship-to-shore cranes are under consideration.
Fees for vehicle carriers: Ships built outside the U.S., not just in China, could face a $150 per car-equivalent unit fee.
LNG export requirements: Increasing mandates for U.S.-built or affiliated ships in liquefied natural gas exports, rising from 1% in 2028 to 15% by 2047.
The USTR clarified that these fees are non-cumulative. According to the Federal Register notice, “If any fee is applied, only one fee will be applied under the terms of the respective Annex.”
Source: https://www.supplychaindive.com/news/us-proceeds-china-linked-ship-fees/745731/
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