US Imposes New Fees on Chinese Ships to Reduce China’s Influence in Maritime Trade
The United States Trade Representative (USTR) has unveiled a plan to impose fees on shipping services provided by Chinese shipping lines and vessels. This initiative aims to diminish China’s dominant position in the global maritime trade market.
Container ships at the Port of Oakland, California, amid heightened trade tensions in February 2025. Reuters/Yonhap News
Details of New Fee Imposition
The proposed fees include a maximum charge of $1 million per ship or $1,000 per TEU for Chinese ships docking at U.S. ports. For shipping companies operating both Chinese and non-Chinese vessels, an additional maximum fee of $1.5 million per ship may apply under certain conditions.
U.S. Policy to Stimulate Domestic Shipping
The USTR has also introduced a policy incentivizing the use of U.S. ships for the transportation of American goods. U.S. exports must be carried by U.S. flagged vessels at a minimum of 1% by the second year, rising to 3% by year three, 5% by year five, and eventually 15% by year seven. The ultimate goal is to shift U.S. exports to American ships.
Impact on Shipping Companies
Shipping companies are likely to respond by separating the operations of ships built in China from those not, ensuring only ships built elsewhere dock at U.S. ports.
China’s Response
China Refutes U.S. Measures
The Chinese Ministry of Commerce responded by stating, “The United States should suspend its wrong treatment.” According to the ministry, multiple dialogues have taken place since March 2024 between China and the U.S. following an investigation initiated under the Biden administration.
The ministry warned, “The newly proposed wharf usage fees and other restrictive measures are detrimental to both parties.” They also expressed concern, saying that the new levies would increase transportation costs linked to U.S. imports, thereby escalating inflation pressures in the U.S.
China vowed to adopt necessary measures to protect its legal rights.
Preceding Criticism During Biden’s Administration
Biden Era Criticized China’s Shipping Sector
The latest move follows a USTR report issued in January 2024, shortly before Trump’s term ended. The report highlighted China’s predatory practices in the marine and shipping sector, attributing a 50% market share in North American routes to government subsidies.
Kathleen Tai, the USTR at the time, criticized China for distorting fair and market-oriented competition, posing economic security risks.
Container ship docked at Dalien Port in northeastern China’s Liaoning Province, February 18, 2025. Xinhua/Yonhap News
According to Bloomberg, the report attributed China’s growth in the shipping sector to subsidies and support from the state, noting that the country’s market share soared from 5% in 2000 to over 50% by 2023. South Korea and Japan hold around 2-3% each, while the U.S. share fell below 1%.
Potential Consequences
Bloomberg predicts that increased fees could create opportunities for South Korean and Japanese shipping companies. However, there are concerns that rising costs could trickle down to American consumers.
U.S. mediawarns that higher prices could lead to additional fees, service cuts, and fare hikes.
Moreover, there are questions about the U.S. shipbuilding industry’s capability to handle additional dry-docks. The U.S. shipyards have not built new vessels since 2017, while China constructs over 1,700 ships annually.
Upcoming Approval Process
The plan is set for approval by Congress on March 24. Analysts suggest that the ultimate implementation will hinge on the Trump administration.
Background: The Jones Act and Its Critique
“Ensuring U.S. Fleet Construction in Allies”: Recent Legislation
Historically protected by laws like the Jones Act, the U.S. shipping industry faced challenges in global competition. This act, established in 1920, restricts foreign ships from carrying goods between U.S. ports. Subsequent legislation in 1965 and 1968 further hindered U.S. military vessel construction abroad.
Recent bipartisan bills aim to modify these laws to allow U.S. military shipbuilding in allied countries, notably Japan and South Korea.
Conclusion: A Complex Trade Issue
The U.S. move to impose fees on Chinese shipping lines underscores the complex interplay of international trade, economic security, and shipping regulations. While the initiative aims to protect domestic industries, it also risks straining U.S.-China relations and potentially increasing costs for American consumers.
As the debate continues, stakeholders across industries will closely monitor the outcome of these legislative measures.
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