Hefty Proposed Fees: The Office of the U.S. Trade Representative (USTR) is proposing fees of up to $1 million per port call for Chinese-built or Chinese-operated ships, citing “unreasonable” state support for China’s maritime industry.
Maritime Executive’s Analysis: Industry watchers call the action “unprecedented” and large enough to “change the economics of container shipping in the U.S. market,” highlighting the pressure on foreign operators that rely on Chinese ships.
Ambitious Implementation Timeline: Public comments open February 21, 2025, with deadlines in March and a final decision expected soon after the March 24 hearing.
Union-Led Petition: A Section 301 petition asserts that China’s dominance in shipbuilding, achieved via subsidies and preferential policies, has decimated the U.S. commercial shipbuilding sector—now at only 0.13 percent of global tonnage.
U.S.-China Capacity Gap: China’s shipyards built approximately 1,000 commercial vessels in 2024, accounting for nearly 50% of global output. In the same year, U.S. shipyards built fewer than 10. This disparity underpins calls for a U.S. shipbuilding revitalization fund.
WASHINGTON D.C. — The Trump administration has proposed new fees on Chinese-built or operated vessels, a policy that could alter global shipping economics. The plan, first announced through a Federal Register notice, stems from a Section 301 investigation targeting what officials term as China’s “aggressive industrial policies” in maritime and shipbuilding.
The proposal includes a potential fee of up to $1 million per port call for ships built in China or operated by Chinese firms. Policymakers suggest applying higher fees to newer ships while rewarding operators for using U.S.-built tonnage. The USTR contends that these steep charges would help offset the “unreasonable and discriminatory” subsidies China allegedly bestows on its state-owned shipbuilders.
Industry observers say that this fee structure is complex and the proposed fees would be a first for the U.S. maritime industry. The Maritime Executive notes that these proposed measures are “large enough to change the economics of container shipping” in the American market. Union leaders argue that China’s shipbuilding subsidies and domestic procurement policies have weakened U.S. commercial shipbuilding. However, some industry groups warn that retaliatory fees could increase shipping costs for American importers.
“After World War II, the U.S. led the world in commercial shipbuilding. Today we’re at under one percent of global tonnage,” the petition states, highlighting that the U.S. fleet has shrunk to fewer than 100 large oceangoing ships built domestically, while China’s ownership exceeds 5,500 ships worldwide.
Key Dates:
February 21, 2025: Public comment period opens on the USTR’s proposal.
March 10, 2025: Deadline for requests to appear at the hearing, including a summary of testimony.
March 24, 2025: Final day for written comments; public hearing to be held in Washington, D.C.
Seven Days After the Hearing: Deadline for post-hearing rebuttal comments.
The Trump administration argues that the fees would protect national security and U.S. shipyard jobs. Critics warn that the policy could provoke trade retaliation from China, affecting U.S. carriers and importers. China could respond by restricting market access or shipping privileges for U.S. carriers, raising concerns about further trade tensions between the U.S. and China.
Still, unions and shipbuilders argue that absent firm action, the United States will continue to remain heavily reliant—raising long-term vulnerabilities for both national security and economic resilience. Much hinges on the coming weeks’ comment period, the public hearing, and whether the administration ultimately moves to implement or modify the most stringent fee provisions.
Our Take:
Who Absorbs the New Costs?
It’s unclear how ocean liners might pass on $1 million port-call fees. While carriers could try increasing freight rates for shippers, many might attempt to push down drayage rates or seek other logistical efficiencies first. Ultimately, some portion may trickle down to consumers, but exactly how much remains to be seen.
Reassigning Non-Chinese Ships
For operators who own multiple vessel types, swapping out Chinese-built ships on U.S. routes could be tricky if much of their fleet is Chinese-made. Retooling network deployments or swapping fleets to different trade lanes involves intricate scheduling, and capacity shortfalls in non-Chinese hulls could hamper a smooth transition.
Easily Avoided by Changing Operators?
Numerous ships around the globe are owned by one entity and operated by another. Chinese shipowners might contract a non-Chinese operating company (Vessel Sharing Agreement) to bypass the proposed fees, effectively changing only the vessel’s operating certificate—raising questions about the long-term enforcement and efficacy of these sanctions.
At Dray Insight, we believe the best decisions come from facts—not politics, not rumors, just reality. Our job is to cut through the noise and deliver insights that matter. We don’t lean left or right. We follow the data. If the facts reveal a tough truth, we won’t sugarcoat it. Expect straight talk and insights that keep you informed—so you can run a more profitable, more efficient operation.
