USTR proposes massive port fees on Chinese-built ships entering U.S. ports

USTR

Operators of Chinese built ships could face a service fee of up $1.5 million for each U.S. port call. As we reported earlier, in response to a petition filed by U.S. unions back in March 2024, then U.S. Trade Representative (USTR) Ambassador Katherine Tai found that China’s targeting the maritime, logistics, and shipbuilding sectors for dominance is actionable under Section 301 of the Trade Act of 1974

Section 301 is a key tool used by the United States to address unfair trade practices and enforce international trade agreements. It grants the office of the U.S. Trade Representative the authority to investigate and take action against foreign countries that violate trade agreements or engage in practices that unfairly burden or restrict U.S. commerce.

The office of the U.S. Trade Representative has now detailed the actions it proposes —including those massive port charges — and is inviting comments from any interested person.

More details on how to comment on the proposed measures HERE. The deadline for submitting comments is March 24, 2025

The proposed measures are set out in detail in a Federal Register notice. In addition to massive port charges, they include a requirement that a percentage of U.S. exports, starting at 1% per calendar year, be carried on U.S.-built ships, that percentage increases incrementally to 15% from the seventh year following enactment of the measures.

Here’s an extract from the Federal Register notice:

Fees on Services:

• Service Fee on Chinese Maritime Transport Operators:
  • A vessel operator of China to be charged a fee on the international maritime transport being provided (a) at a rate of up to $1,000,000 per entrance of any vessel of that operator to a U.S. port; or (b) per entrance of any vessel of that operator to a U.S. port, at a rate of up to $1,000 per net ton of the vessel’s capacity.
• Service Fee on Maritime Transport Operators with Fleets Comprised of Chinese-Built Vessels:
  • Upon the entrance of a Chinese-built vessel to a U.S. port, a fee to be charged to that vessel’s operator on the international maritime transport provided via that vessel (a) at a rate of up to $1,500,000; (b) based on the percentage of Chinese-built vessels in that operator’s fleet: for operators with 50 percent or greater of their fleet comprised of Chinese-built vessels, the operator will be charged up to $1,000,000 per vessel entrance to a U.S. port; for operators with greater than 25 percent and less than 50 percent of their fleet comprised of Chinese-built vessels, the operator will be charged a fee up to $750,000 per vessel entrance to a U.S. port; for operators with greater than 0 percent and less than 25 percent of their fleet comprised of Chinese-built vessels, the operator will be charged a fee up to $500,000 per vessel entrance to a U.S. port; or (c) based on the percentage of Chinese-built vessels in an operator’s fleet: an additional fee of up to $1,000,000 will be charged to a vessel operator per vessel entrance to a U.S. port if the number of Chinese-built vessels in the operator’s fleet is equal to or greater than 25 percent.
• Service Fee on Maritime Transport Operators with Prospective Orders for Chinese Vessels:
  • An additional fee based on the percentage of vessels ordered from Chinese shipyards: (a) for operators with 50 percent or greater of their vessel orders in Chinese shipyards or vessels expected to be delivered by Chinese shipyards over the next 24 months, the operator will be charged up to $1,000,000 per vessel entrance to a U.S. port; for operators with greater than 25 percent and less than 50 percent of their vessel orders in Chinese shipyards or expected to be delivered by Chinese shipyards over the next 24 months, the operator will be charged up to $750,000 per vessel entrance to a U.S. port; for operators with greater than 0 percent and less than 25 percent of their vessel orders in Chinese shipyards or expected to be delivered by Chinese shipyards over the next 24 months, the operator will be charged up to $500,000 per vessel entrance to a U.S. port; or (b) a fee of up to $1,000,000 per vessel entrance to a U.S. port will be charged to a vessel operator if 25 percent or more of the total number of vessels ordered by that operator, or expected to be delivered to that operator, are ordered or expected to be delivered by Chinese shipyards over the next 24 months.
• Service Fee Remission for Maritime Transport via U.S.-built Vessels:
  • Additional fees on the maritime transport services charged to an operator addressed in this section, may be refunded, on a calendar year basis, in an amount up to $1,000,000 per entry into a U.S. port of a U.S.-built vessel through which the operator is providing international maritime transport services.

Restrictions on services to promote the transport of U.S. goods on U.S. vessels:

• The international maritime transport of all U.S. goods, such as capital goods, consumer goods, agricultural products, and chemical, petroleum, or gas products, must comply with the following schedule:
  • Effective as of the date of action, the international maritime transport of at least 1 percent of U.S. products, per calendar year, that is exported by vessel, is restricted to export on U.S.-flagged vessels by U.S. operators.
  • Effective as of 2 years following the date of action, the international maritime transport of at least 3 percent of U.S. products, per calendar year, that is exported by vessel, is restricted to export on U.S.-flagged vessels by U.S. operators.
  • Effective as of 3 years following the date of action, the international maritime transport of at least 5 percent of U.S. goods, per calendar year, that is exported by vessel, is restricted to export on U.S.-flagged vessels by U.S. operators, of which 3 percent must be U.S.-flagged, U.S.-built vessels, by U.S. operators.
  • Effective as of 7 years following the date of action, the international maritime transport of at least 15 percent of U.S. goods, per calendar year, is restricted to export on U.S.- flagged vessels by U.S. operators, of which 5 percent must be U.S.-flagged, U.S.-built vessels, by U.S. operators.
• The international maritime transport of U.S. goods must comply with the following restriction:
  • U.S. goods are to be exported on U.S.-flagged, U.S.-built vessels, but may be approved for export on a non-U.S.-built vessel provided the operator providing international maritime transport services demonstrates that at least 20 percent of U.S. products, per calendar year, that the operator will transport by vessel, will be transported on U.S.- flagged, U.S.-built ships.

Other Actions:

• Actions to reduce exposure to and risks from China’s promotion of the National Transportation and Logistics Public Information Platform (LOGINK) or other similar platforms, such as recommending that relevant U.S. agencies investigate alleged anticompetitive practices from Chinese shipping companies, restricting LOGINK access to U.S. shipping data, or banning or continuing to ban terminals at U.S. ports and U.S. ports from using LOGINK software. In addition to the proposed actions, the U.S. Trade Representative also may consider entering into negotwith allies and partners in order to counteract China’s acts, policies, and practices and to reduce dependencies on China in the maritime, logistics, and shipbuilding sectors.