Trump administration proposes steep fees on Chinese cargo ships

The new policy would charge Chinese-owned cargo ships, as well as third-country flagged vessels built in China, $1 million or more per port-of-call in the U.S.

Large container ships often make multiple stops when delivering goods to the U.S., and would face new fees at each port.

The Office of the U.S. Trade Representative (USTR) published the proposal Friday, tying it to an investigation into allegations by several U.S. labor unions that China has unfairly distorted the international shipbuilding industry.

The investigation, conducted under Section 301 of the Trade Act of 1974, determined that the Chinese government has pursued a policy of subsidizing its domestic shipbuilding industry with the aim of “targeting for dominance” the global market.

Growing market share

The investigation pointed out that over the past 25 years, China’s share of the global shipbuilding industry has exploded. China accounted for about 5% of the total tonnage of ships manufactured in 1999. By 2023, the Chinese share of the market surpassed 50%.

The USTR found that Chinese policy “burdens or restricts U.S. commerce by undercutting business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors; restricting competition and choice; creating economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the U.S. economy; and undermining supply chain resilience.”

“There's no way around it.”

In an email exchange with VOA, Joe Kramek, World Shipping Council president and CEO, echoed those concerns.

"USTR's proposed draconian $1 million-plus per U.S. port visit fees on ships that carry the large majority of the U.S. trade, if they are Chinese-built or –operated – or on any ship operator from any country that has even a single Chinese ship in its fleet or on order – if carried forward, would cause broad economic harm across all sectors of the U.S. supply chain,” wrote Kramek, whose organization represents shipping companies.

“The fees would result in fewer U.S. port calls, higher prices for U.S. consumers, and severe impacts for exporters, particularly American farmers,” he wrote.

Unlikely to benefit US shipbuilders

Though ostensibly aimed at helping U.S. shipbuilders, the law is unlikely to have a significant impact on that industry, said Marc Levinson, a Washington-based economist and historian who has written two books about container shipping.

“This is not likely to do much for U.S. shipbuilding,” Levinson told VOA. “U.S. commercial shipbuilders are very far away from global scale. They don't produce anything that is competitive on the international market for commercial oceangoing vessels.”

“The winners of this policy would be Japan, Korea, the Philippines, other countries where commercial shipbuilding is on a larger scale today than the United States,” Levinson said. The losers, he added, will include U.S. consumers, as the port fees are passed on in the form of higher prices for imported goods.

In an email exchange with VOA, the National Retail Federation registered its opposition to the policy, writing, “NRF strongly opposes a port fee remedy, which will do nothing to force China to change its behavior and practices. It will only increase shipping costs for retailers and further disrupt the maritime market.”