Port Fees on Chinese Ships Would Hit U.S. Ag, Energy and Shipping
While businesses have been closely following the Trump administration's tariff policies, the seven-figure port fee proposal from the US Trade Representative (USTR) could have even deeper effects on American shipping interests. If adopted, Chinese-built ships - and global operators who use Chinese-built ships elsewhere - would have to pay millions of dollars for every port call in the U.S. Exporters would be required to ship an increasing percentage of their goods on U.S.-flagged tonnage, and eventually on scarce U.S.-built tonnage. This plan's steep costs could be enough to put some smaller companies out of business, drive others away from American shores, or end some categories of American exports altogether, maritime businesses and shippers warned in comments to the USTR.
ACL, the conro specialist that operates in Transatlantic trade, handles more than half of the American heavy machinery and equipment exports from New York, Baltimore and Norfolk to Europe. It is the only U.S.-headquartered carrier serving these American manufacturers on the East Coast. In a submission to the USTR, ACL explained that it went to China to buy all five of its specialized new conros because no one else would build them. In 2012, the few qualified U.S. yards said that they were booked seven years out with Navy work; Japanese yards didn't want to bid on such a small series; and Korean yards said that it wasn't worth the cost of doing a design for just five vessels. When ACL asked around in China, it received a competitive offer, and the vessels got built under class supervision in Shanghai.
If the multi-million-dollar fees went into effect, ACL said, it would make the company "totally uncompetitive versus the other carriers in the US trades," and ACL would be forced to shut down its U.S. operations. It would cease services, close its U.S. headquarters, lay off its staff and leave American shippers using foreign shipping services. Those foreign operators would become dramatically more expensive, ACL warned.
"US export container rates to Europe for a carrier with a Chinese-built fleet - now averaging $500 per 40-foot container today - would climb to around $2,500 per 40-foot overnight – a 500% increase – simply to cover the new service fee," ACL said. "American manufacturers would have less choice of carriers and face significantly higher transportation costs."
SeaPort Manatee, the largest port in Southwest Florida, noted that the port fees would likely end the U.S. operations of the regional line World Direct Shipping (WDS). WDS is a Florida-headquartered container line connecting the U.S. with Mexico, and supports about $1 billion a year in U.S. economic activity. "Cargo would be diverted from WDS vessels to trucks, resulting in 1,000 more trucks crossing the border each week, and increase congestion at Texas border crossings and increase wear/tear on U.S. highways," noted the port authority. "The proposed action is very likely to negatively impact United States supply chains . . . and negatively impact American businesses and families (e.g., lost jobs; increased cost of goods and services)."
U.S. agricultural interests are also concerned. The US Agriculture Transportation Coalition, a trade body for farmers who export goods by container, warned that the fees would "render US ag unaffordable and uncompetitive." The group believes that this would have an extreme impact on U.S. agricultural commodity exports. "Because there is ample substitute supply from other countries, it would end US ag sales to foreign markets," the association warned.
Energy Products Partners, a leading U.S. midstream firm, warned that the fees would also have a devastating impact on oil and gas exports. If the fees take effect, "there will be no ‘drill baby drill’ [and] the ‘liquid gold’ under our feet would stay in the ground," EPP warned.
The costs outlined by the USTR could also be just a starting point. Beijing could take its own actions in response, further raising costs, one established freight broker noted. "The reality is that, similar to the retaliation of U.S. trading partners to recent major tariff increases, similar fees would be imposed on U.S. ships calling Chinese ports," the broker warned.
The International Longshore and Warehouse Union (ILWU)'s Washington branch also pointed out that the extra charges could incentivize carriers to simply offload cargo outside of the United States - in Mexico or Canada - and then truck it across the border without paying the port fees. Without parallel restrictions to equalize costs at the land border, U.S. port traffic and longshore jobs could decline.
China Calls on US to Stop “Wrongdoings” Over Proposed Fees on Chinese Ships
A spokesperson for China’s Foreign Ministry responded to a question from Reuters calling the proposed fees on Chinese-built ships “wrongdoings.” It comes as the war of words continues, and the trade war heats up after Donald Trump began imposing new tariffs.
The White House is yet to officially comment on its response to the U.S. Trade Representative’s finding that China unfairly subsidized and supported its shipbuilding industry. The report issued in January recommended actions after finding China was dominating shipbuilding through the state-owned industry and a broad system of support.
Reuters asked for comments from the Foreign Office after the news agency last week reported the Trump administration was seeking allied support for a series of fees against Chinese-built ships. It is believed the U.S. will charge a fee on any Chinese-built ship calling in U.S. ports regardless of the nationality of the shipowner. Further, the fee would be commensurate to the percentage of Chinese ships in the owner’s fleet.
“Such measures as imposing port fees and levying tariffs on cargo handling facilities hurt the U.S. itself as well as others,” Foreign Ministry spokesperson Mao Ning said during Monday’s press briefing. “The move not only hikes global maritime shipping costs and disrupts the stability of global industrial and supply chains, but also increases inflationary pressures in the U.S. and hurts the interests of American consumers and businesses.”
Industry analysts Alphaliner analyzed the global containership fleet. In its report, it says “37.8 percent of the current active containership fleet was built in Chinese shipyards.” It has been highlighted in other reports that this includes all the major carriers. MSC Mediterranean Shipping has drawn extensively on relationships with China and the Chinese leasing industry as it is building its fleet of ultra large container vessels. CMA CGM developed its large LNG-fueled ships in China and just this week Hudong-Zhonghua Shipbuilding is highlighting sea trials for a new generation of 24,000 TEU LNG-fueled containerships for CMA CGM.
The global containership order book is reported at nearly 800 vessels. Alphaliner reports that 70 percent of the orders are placed with Chinese shipyards. It notes that “out of the Top 10 shipyards in terms of vessels on order, seven are located in China.”
Chinese officials have been speaking out against the U.S. trade investigation since it was first launched in 2024. They have repeatedly said the problems with U.S. shipbuilding were long and deep-seated issues while China is using technology to advance its industry.
“The practice will ultimately fail to revitalize the U.S. shipbuilding industry,” said Mao Ning. “We urge the U.S. to respect facts and multilateral rules, and immediately stop its wrongdoings. China will take necessary measures to defend its lawful rights and interests.”
The U.S. Trade Representative’s office is currently receiving comments on its proposals. A public hearing is scheduled for March 24, which is the same day the comment period is due to close.
US takes rivalry with China to the high seas
AFP
March 9, 2025
A China Coast Guard ship (top) and a Philippine supply boat were engaged in 2014 stand off in the South China Sea (AFP Photo/Jay Directo)
The United States may still have the world's most powerful navy but it seems to have realised that this is no longer sufficient to reassert US supremacy over the high seas.
If President Donald Trump's pronouncements on shipbuilding, the Panama Canal and Greenland are anything to go by, he wants to increase US sea power on several fronts -- just as China is already doing.
Beijing's expanding influence on the world's oceans is a challenge to Washington's efforts to protect its interests.
While the United States still dominates the seas militarily, it is weaker in other maritime sectors, such as merchant shipping and shipbuilding itself, analysts told AFP.
Trump told the US Congress last week that his administration would "resurrect" the country's nautical construction industry "including commercial shipbuilding and military shipbuilding".
On China, he has complained that Beijing "controls" the Panama Canal and has refused to rule out military force to wrest control of a vital strategic asset.
The president has been equally blunt about wanting to take over Greenland, a Danish territory whose untapped mineral and oil reserves he covets.
And he wants to tax any Chinese vessel that docks in US ports.
Researcher Sophie Quintin, of Portsmouth University in the UK, said Trump's approach smacked of a return to "navalism" -- a theory stressing the importance of sea power espoused by 19th-century US naval officer Alfred Mahan.
On the other hand, Trump might just be appealing to his populist voter base, the Make America Great Again (MAGA) faithful.
"It's difficult to know if it's the fruit of a real strategic reflection," said Alessio Patalano, a specialist in maritime strategy at King's College, London.
"In the end, it doesn't matter. Serving the interests of MAGA voters by restarting naval shipyards or taxing Chinese boats leads to a navalist policy."
- Chinese sea power -
In any case, China understands the importance of sea power, said Nick Childs of Britain's International Institute for Strategic Studies.
At a Paris conference last month, Childs pointed to China's rapid expansion in maritime sectors other than its own navy.
"There are the investments we've been hearing about in global ports, global maritime infrastructure and the weaponising of the fishing fleet," he said.
Washington is concerned by the expansion of Chinese shipping companies, which they see as serving the interests of the Beijing government.
"Beijing's economic control of port operations at strategic chokepoints across the world -- many of which are part of the Maritime Silk Road initiative -- pose a threat to the United States and its allies," opined US think tank the Jamestown Foundation in February.
It cited in particular two state-owned firms, COSCO and China Merchant Ports.
Beijing could also exert "significant influence" on a third, the privately owned Hutchison Port Holdings, which controls two ports on the Panama Canal, it said.
But Paul Tourret, of France's Higher Institute of Maritime Economics (ISEMAR), cautioned against too "simplistic" a reading of China's maritime policy.
"COSCO, for example, follows a financial logic. It merely delivers to the United States the goods that Americans consume," he said.
Nevertheless, pressure from Washington seems to have had some effect.
Hutchison announced last week it had agreed to sell its lucrative Panama Canal ports to a US-led consortium, although it insisted this was a "purely commercial" decision.
- Gaps in US presence -
While the United States may have the world's most powerful navy, its merchant fleet is not in such good shape, said Quintin.
"US shipping companies have significantly declined and what remains of its commercial fleet is ageing," she said.
"That has repercussions for its strategic fleet," she added, referring to civilian ships used for military transport.
"Furthermore, the shipbuilding sector is in crisis."
Tourret agreed: "There's no way the US can build ships quickly."
"The problem with US shipbuilding is that they don't have the know-how of the Japanese and Koreans, and they don't have the scale of the Chinese, who churn ships out like biscuits," added Patalano.
"When Europe is one year behind on a military programme, the US is three or four years late," said a European industry source on condition of anonymity.
Trump's avowed desire to seize control of Greenland and Canada can also be viewed as a bid to regain US dominance over the seas.
Global heating is melting Arctic ice at an alarming rate, endangering natural ecosystems and contributing to further climate change.
But that melting could also open up the region to vessels -- both commercial and military -- and to oil and mineral exploration.
Those prospects have not been lost on China, Russia or the United States.
"The Arctic space will become increasingly important for power projection, especially for missile-launching submarines," said Patalano, who sees these as "an essential component of deterrence".
Here again, "the United States is lagging behind", said Quintin.
"While China is capable of deploying three icebreakers, the US Coast Guard struggles to keep its two ageing vessels in service," she said.
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