Last week, the United States Trade Representative (USTR) unveiled plans to impose port fees on Chinese ships. This latest action, largely viewed through a national security lens, is intended to bolster domestic shipbuilding and address China’s growing grip on the industry. 180 days from now, we will begin to enforce fees on impacted vessels. These charges are intended to promote the use of U.S.-built vessels that carry liquefied natural gas (LNG).
Under the new regulations, ships built non-U.S. will pay a fee of $150 for every vehicle transported. Chinese-built ships would pay, at least at first, a $18/ton or $120/container surcharge. These rates are projected to increase during the next three years. Importantly, the USTR stated that the fees will only be assessed one time per voyage. This effectively caps a defined vessel’s exposure to only six fees each year.
These new measures are explained by the USTR as targeted specifically at Chinese ship owners and operators. Beginning at $50 per ton of cargo, the fees increase $30 annually over the next three years. Under the proposal, cargo weight would be the deciding factor in the amount of the fees. So too will the further container moves or vehicle flows that they’ll be based on.
As the White House announcement explicitly noted, the new fees will not apply to empty ships coming into U.S. ports to load up with bulk exports such as coal or grain. Moreover, it further exempts Chinese ships transporting LNG. This decision is consistent with the objective of strengthening U.S. maritime industries and improving the competitiveness of those industries in the global market.
“China has largely achieved its dominance goals, severely disadvantaging U.S. companies, workers, and the U.S. economy,” said a spokesperson for the USTR in a formal statement regarding the announcement.
The proposed fee structure is a more even-handed approach. This is in stark contrast to a much earlier February Administration proposal that would have imposed fees of up to $1.5 million on every Chinese vessel calling on an American port. The advanced plan is a measured approach to protecting American shipbuilding interests while treading lightly on the murky waters of trade relations with global allies.
Marco Forgione, director general of the Chartered Institute of Export & International Trade, expressed his perspective on the implications of these measures. “That’s a direct impact of what President Trump is doing,” he noted, emphasizing the heightened tension in global trade dynamics.
Trade experts warned that these measures would further muddy the already churned-up global trade terrain. This problem has been exacerbated by other tariffs and trade restrictions that have been imposed by the last two administrations. Forgione added, “I do believe that if more cargo is going to be routed towards Europe, finding new buyers that will drive up the volumes even further could lead to more congestion.”
Thank you to the USTR for this exciting announcement. This as a myriad of shipping lanes are currently undergoing a major upheaval due to changing global trade patterns. Forgione remarked, “We’ve seen a lot of diversion of ships from China that were due to head to the U.S., diverting and coming to the UK and into the EU.” This trend paints a disturbing picture of the challenges that U.S. exporters continue to face as they struggle to compete in an increasingly competitive global market.