Washington proposes steep charges on Chinese ships entering ports
The Office of the U.S. Trade Representative has proposed substantial fees on Chinese-built ocean cargo ships entering U.S. ports.
WASHINGTON – The Office of the U.S. Trade Representative proposed substantial fees on Chinese-built ocean cargo ships entering U.S. ports last week as part of an effort to curb China’s dominance in the sector and increase U.S. presence.
Under President Joe Biden last April, the USTR launched a probe into China’s growing control over the shipbuilding sector and found that China’s 5% market share in 1999 had grown to more than 50% in 2023.
Now, the USTR has proposed several ways to combat this dominance. One is charging port entrance fees of up to $1 million per vessel owned by Chinese operators. Another is to charge $1,000 per net ton of a vessel’s cargo capacity.
The USTR also is targeting non-Chinese shipping companies with Chinese-built ships making up half their fleets, proposing $1 million to $1.5 million in fees for every port entry, regardless of ship origin.
The second part of the remedy includes attempting to strengthen American shipbuilding. The USTR has proposed the mandatory use of U.S.-built vessels to carry U.S. exports on a sliding scale. For example, in the first year of implementation, at least 1% of all U.S. exports must be transported on U.S.-built ships. Percentages would rise to 15% by year seven.
Finally, any company charged for using Chinese-built ships can be refunded up to $1 million per entry for using a U.S.-built vessel.
Ocean container trade blog LinerLytica said the potential of these policies could cause widespread disruption over the coming months.
“Chinese carriers would be most affected by the levies, and their potential exodus would create a void in the market as they account for 17% of U.S. container imports from the Far East,” it wrote in a blog post. “These uncertainties add to the current challenges that carriers are facing, with freight rates continuing to slide and carriers unable to maintain capacity discipline in the midst the roll-out of new Alliance services.”
The USTR is accepting public comments on the proposals. The deadline is March 24, with a public hearing planned for that date.
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