Trump Administration Proposes Massive Port Fees on Chinese-Built Vessels

The Office of the United States Trade Representative (USTR) has announced sweeping new measures targeting China’s growing dominance in global maritime sectors, including potential fees of up to $1.5 million per port call for Chinese-built vessels, $1 million per port call for operators of Chinese-built ships, and mandatory U.S.-flag shipping requirements.

The proposed actions, published to the Federal Register on Friday by Acting U.S. Trade Representative Juan Millan, come after a recent USTR Section 301 investigation found that “China’s acts, policies, and practices to be unreasonable and to burden or restrict US commerce.”

The investigation was initiated following a petition filed in March 2024 by five major U.S. labor unions, including the United Steel Workers and the Maritime Trades Department, AFL-CIO?

The USTR’s findings reveal China’s dramatic rise in global ship production—from less than 5% in 1999 to over 50% in 2023. China also dominates the maritime supply chain, controlling 95% of global shipping container production and 86% of the world’s intermodal chassis supply. Additionally, China’s ownership of the global commercial fleet has reached over 19% as of January 2024.

“China frames its targeting for dominance in the maritime, logistics, and shipbuilding sectors in nationalistic terms as a zero-sum contest pitting companies it controls against all others,” states the USTR report, which also highlights how China’s state-backed entities benefit from extensive subsidies, preferential financing, and regulatory advantages that distort global competition.

In response, the USTR has now proposed a series of aggressive measures that could significantly reshape the maritime trade landscape.

The proposed measures not only include a flat fee of $1,500,000 per port call of a Chinese-built vessel to a U.S. port, but also tiered fees per U.S. port call for operators with exposure to Chinese-built ships and newbuild orders at Chinese yards. For example, operators with fleets comprising more than 50% Chinese-built vessels could face fees up to $1 million per U.S. port call, while those with 25-50% Chinese-built vessels would pay up to $750,000 per call. Vessel operators with shipbuilding orders in China could also face fees up to $1 million per port call, based on orderbook composition.

The proposal would also mandate increasing percentages of U.S. exports to be carried on American-flag vessels. Starting at 1% of cargo immediately upon implementation, the requirements would rise to 15% within seven years, with specific allocations for U.S.-built vessels.

The action also targets China’s LOGINK logistics platform, citing concerns about sensitive data access. The proposal suggests potential restrictions or bans on LOGINK’s use in U.S. ports.

In the initial petition, the five labor unions called for fees on Chinese-built vessels docking at US ports, with costs varying based on vessel tonnage and age, with higher fees on newer and larger ships. A proposed “US Commercial Shipbuilding Revitalization Fund” would collect these fees to support the Construction Differential Subsidy program, which historically supported domestic shipbuilding before its 1982 defunding.

The U.S. government’s proposed trade actions mark one of the most significant attempts to curb China’s growing dominance in global shipping and shipbuilding. However, the proposed measures also carry risks, including potential supply chain disruptions and retaliatory actions from Beijing.

Industry stakeholders can provide feedback on the proposed measures at a public hearing scheduled for March 24, 2025, at the International Trade Commission. Written comments must be submitted by the same date.

Summary of Proposed Actions:

Fees on Services:

1. Service Fee on Chinese Maritime Transport Operators:
   • Up to $1,000,000 per entrance of any vessel operated by a Chinese company to a U.S. port.
   • Alternatively, up to $1,000 per net ton of the vessel’s capacity.
2. Service Fee on Maritime Transport Operators with Fleets Comprised of Chinese-Built Vessels:
   • Flat Fee: Up to $1,500,000 per entrance of a Chinese-built vessel to a U.S. port.
   • Tiered Fees Based on Fleet Composition:
     • 50%+ Chinese-built fleet: Up to $1,000,000 per entrance.
     • 25–50% Chinese-built fleet: Up to $750,000 per entrance.
     • 0–25% Chinese-built fleet: Up to $500,000 per entrance.
   • Additional Fee: Up to $1,000,000 per entrance if the operator’s fleet consists of at least 25% Chinese-built vessels.
3. Service Fee on Maritime Transport Operators with Prospective Orders for Chinese Vessels:
   • Tiered Fees Based on Orders from Chinese Shipyards:
     • 50%+ of vessels ordered: Up to $1,000,000 per entrance.
     • 25–50% of vessels ordered: Up to $750,000 per entrance.
     • 0–25% of vessels ordered: Up to $500,000 per entrance.
   • Additional Fee: Up to $1,000,000 per entrance if 25% or more of total vessels ordered are from Chinese shipyards.
4. Service Fee Remission for Maritime Transport via U.S.-built Vessels:
   • Operators subject to fees can receive a refund of up to $1,000,000 per U.S. port entrance for using U.S.-built vessels.

Restrictions on Services to Promote U.S.-Built and U.S.-Flagged Vessels:

1. Mandatory Use of U.S.-Flagged Vessels for U.S. Exports (Phased Implementation):
   • Year 1: At least 1% of U.S. exports must be transported on U.S.-flagged vessels.
   • Year 2: At least 3% of U.S. exports must be transported on U.S.-flagged vessels.
   • Year 3: At least 5% of U.S. exports must be transported on U.S.-flagged vessels, with 3% on U.S.-built, U.S.-flagged vessels.
   • Year 7: At least 15% of U.S. exports must be transported on U.S.-flagged vessels, with 5% on U.S.-built, U.S.-flagged vessels.
2. U.S. Goods Transport Restriction:
   • U.S. goods must be transported on U.S.-flagged, U.S.-built vessels.
   • Operators may use non-U.S.-built vessels only if they commit to transporting at least 20% of their U.S. exports on U.S.-built, U.S.-flagged ships.

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