Following a final hearing scheduled for March 26 seeking public comments on unfair trade practices by China against American shipping, the Trump administration through its US Trade Representative (USTR), could soon decide whether to levy sizable fees on vessel operators using state-subsidized Chinese ships that call at US ports.
President Trump’s new appointment to head the Federal Maritime Commission, Louis Sola, recently told the Financial Times, “We need to offset the subsidies that China has given their own shipbuilding industry. Where should that money go to,” he said. “That money should be invested into American shipping.”
Proposed actions being considered by the administration follow a recently completed Section 301 investigation into China’s targeting of the maritime, logistics and shipbuilding sectors for “dominance.” Following final public comments on Wednesday, USTR is expected to finalize its proposal under unfair trade practices law.
As part of a recently published USTR report entitled “2025 Trade Policy Agenda and 2024 Annual Report,” under proposed actions, a service fee could be charged on Chinese maritime transport operators, whereby operators would have to pay up to $1 million for each vessel entering a US port, or up to $1,000 per net ton of the vessel’s capacity each time it enters a US port. USTR also proposed a service fee on maritime transport operators with fleets comprised of Chinese-built vessels of as much as $1.5 million, depending on the percent of Chinese-built vessels that make up that fleet, as well as up to $1 million for operators with orders within the next 24 months from Chinese shipyards. The USTRs plan would also set minimum exports for US built and flagged vessels.
As it now stands, to avoid fees under the current proposal, vessel operators would have to be based outside of China and operate fleets with less than one-quarter of their ships built in China. They would also have to have no Chinese shipyard orders or deliveries scheduled within the next two years.
According to the USTR investigation, it was found that China’s targeting for dominance was “unreasonable” because they said it “displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, lessening competition and creating dependence on China.” It also increases risk by reducing supply chain resilience because of the government’s extraordinary control over its economic actors and these sectors, the USTR report said.
USTR also said China’s targeting for dominance “burdens or restricts U.S. commerce by undercutting business opportunities for and investments in the U.S. maritime, logistics and shipbuilding sectors; restricting competition and choice; creating economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the US economy, and undermines supply chain resilience.”
According to shipbroker Clarkeson’s in 2024, more than 36,000 ships could have been affected by the proposed measures, which would have generated annual fees amounting to more than $52 billion.
“To boost our defense industrial base, we are also going to resurrect the American shipbuilding industry, including commercial and military shipbuilding,” Trump told lawmakers recently.
Section 301(b) of the Trade Act is designed to address unfair foreign practices affecting U.S. commerce. According to the act, Section 301(b) may be used to respond to unreasonable or discriminatory foreign government acts, policies and practices that burden or restrict U.S. commerce.
Section 301(c) of the Trade Act authorizes USTR to take certain actions for the purposes of carrying out the provisions of Section 301(b), such as imposing duties, fees or import restrictions on the goods and services of the foreign country concerned.
According to shipping data, of the nearly 21,000 vessels in the world’s bulk shipping fleet, nearly half of the them were made in China. Only five ships currently operating in the global fleet were built in the United States.