Just recently, the Trump administration released their National Security Memorandum 20, which authorizes fees on maritime vessels built in China. This effort would increase domestic ship building and reduce our dependency on foreign-built ships. This new initiative comes as the U.S. government is finally getting serious about countering China’s overwhelming monopoly power in the global shipbuilding sector. Indeed, today China dominates upwards of 75% to 80% of the world fleets.
Under both the Trump and Biden administrations, the U.S. Trade Representative carried out such an investigation. It finally shone a spotlight on China’s unfair shipbuilding practices that hamper U.S. commerce. The results have forced the government to take action. Now, their attention has turned to recharging American industrial might and guaranteeing economic security.
The administration’s proposal opens the door to heavy new levies on Chinese-built vessels calling at U.S. ports. Beginning on April 17, 2025, the fee structure will be progressive. They start at a $0 charge per container discharged, rising to $80 per net ton starting on April 17, 2026, and up to $110 per net ton by April 17, 2027. The proposed fees would be charged up to five times per year per vessel.
The $400-$1,000 progressive burden on vessel owners spurred by the Trump administration is not the solution. Yet they’re eligible for a remission of these fees if they can demonstrate that they possess a U.S. shipbuilding order. This provision is designed to encourage more investment in American shipbuilding, thereby supporting local jobs and industries.
Shipping, U.S. Trade Representative Jamieson Greer observed, is vital to our nation’s economy, noting,
“Ships and shipping are vital to American economic security and the free flow of commerce.”
The Biden administration even announced an investigation into China’s subsidies and state owned enterprises in the shipbuilding sector. This shift points to a growing bipartisan worry over foreign influence in strategic industries. The report’s conclusions have since led to a unified response — one that would help establish a more level playing field for U.S. manufacturers.
As a component of its long-term strategy, the administration plans to phase-in these fees over the next few years. The policy begins with a base fee of $150 per Car Equivalent Unit (CEU) to be phased in within 180 days of the announcement. The goal is to raise revenue but to incentivize bringing more shipbuilding back to American shores.
Container vessels range from 50,000 tons to 220,000 tons. This potential change represents a huge financial risk for shipping companies, depending on the makeup of their fleets. Virtually all U.S. companies rely on global supply chains, particularly for moving goods. The implementation of these fees creates even more stress during this crucial period.
This major policy shakeup has the potential to greatly upend the maritime landscape. It supports domestic shipbuilding and decreases the United States’ dependence on foreign-built vessels. We’re heartened that the administration is pushing this direction. Stakeholders from every sector will be watching to see how it reshapes trade subsidies or the ongoing race to a post-COVID economic recovery.