Chinese-Built Ship Fees Could Cause Major U.S. Port Congestion, Analysts Warn

Maritime analysts are sounding the alarm that the Trump Administration’s proposed fees on China-built container ships could severely disrupt US supply chains, potentially causing port congestion, increased freight rates, and shifts in global trade patterns.

The United States Trade Representative (USTR) this week announced a proposal to impose a $1 million fee every time a vessel operated by a Chinese carrier enters a U.S. port and up to $1.5 million per port call for Chinese-built ships regardless of the carrier’s nationality. Additional substantial fees are threatened for carriers based on the percentage of new ships on order being built in China.

Peter Sand, Chief Analyst at Xeneta, warns that ocean carriers will likely take evasive action to avoid these fees by calling at fewer U.S. ports, which could trigger major congestion and delays across American maritime gateways.

“We saw a similar situation last year when carriers cut port calls in Asia and handled more containers per call at Singapore to offset the impact of the Red Sea crisis,” Sand noted. “The intentions were good, but the severe congestion caused by handling more containers in Singapore rippled across global supply chains and saw average spot rates from the Far East to US East Coast spike more than 300%.”

World’s Largest Ocean Carriers Face Costly U.S. Port Fees Under Proposed Rules

MarineTraffic.com data shows the U.S. is highly exposed to owners with Chinese-built ships, with 2,717 of Chinese-built vessels regularly calling at its ports.

According to Drewry’s preliminary assessment, the impact of the proposed tariff fees would be massive if implemented. The firm estimates that more than 80% of current containerships calling at U.S ports would be affected by these tariffs, either because the operator is Chinese-based, the ships are China-built, or the operator has ordered ships from Chinese shipyards.

For typical containerships servicing the main US trade routes, Drewry estimates tariff fee would cost between approximately $222 and $500 per TEU of ship capacity, and between $2 million and $3 million per sailing. Drewry points out these costs would be seven to sixteen times higher than Europe’s new Emission Trading Scheme carbon taxes.

Chinese carrier COSCO faces the heaviest impact as it’s not only the sole Chinese carrier in the global top 10 but also has nearly two-thirds of its fleet built in China and 90% of its orderbook coming from Chinese yards. Since the proposed penalties were announced on April 21, COSCO Shipping Holdings’ share price has fallen 4% while the Hong Kong stock exchange overall index rose 3% during the same period.

European carriers including MSC, Maersk, CMA CGM, and Hapag-Lloyd will also feel significant effects from the orderbook fee, as all have more than half of their current orderbooks in Chinese yards.

Sand suggests that shippers might seek workarounds by importing goods into the US via Mexico and Canada—a trend that’s already growing, with 2024 imports from China to Mexico up 15% compared to 2023 at 1.42 million TEU, and imports from China to Canada up 16% at 1.8 million TEU.

“Shippers have been using Mexico and Canada as a back door into the US to avoid tariffs on imports from China,” Sand explained. “Trump has vowed to stop this trend by imposing tariffs of 25% on imports from Mexico and Canada. But if shippers now face new port fees on top of the tariffs when importing directly into the US, it could change the situation again and fuel further growth in imports from China to Mexico and Canada. Ironically, Trump may be indirectly driving one of the very things he’s trying to guard against.”

The proposed vessel fees add to an already complicated trade landscape. The US administration has recently added another 10% of tariffs on imports from China (effective February 4), is planning to implement 25% tariffs on imports from Mexico and Canada from March 4 (after a temporary reprieve), and has announced plans to introduce 25% tariffs on imports from the European Union “very soon.”

European Union officials have indicated they will resist these tariffs and suggested they could impose retaliatory measures on US exports to Europe.

Sand concluded: “The threat of even higher costs to import goods into the US should be taken very seriously, but it remains to be seen whether it becomes a reality due to the impact it will have for US businesses and, ultimately, consumers.”

“The potential repercussions and unintended side-effects of these port fees are impossible to predict with any degree of certainty, which makes it such a challenging situation for both US importers and carriers.”

A hearing on the proposal is currently scheduled for March 24, 2025, and public comments are open until then.

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