The U.S. Imposes Port Fees on Chinese Ships as the Trump Administration Escalates the Trade War

On April 17, 2025, the Office of the United States Trade Representative announced a port fee policy targeting Chinese ship port fees, set to take effect 180 days later. This policy originates from an investigation conducted during the Trump administration, accusing China's shipbuilding industry of gaining unfair advantages through subsidies and monopolistic practices. The new measures impose high fees on ships built in or owned by China, featuring tiered rates and exemption conditions, aiming to diminish China's influence in the global shipping industry and foster the growth of the American shipbuilding industry.

Policy Background and Origin

The current port fee policy originated in 2024, when the United States Trade Representative (USTR) initiated an investigation into China's maritime and shipbuilding industries under Section 301 of the Trade Act of 1974. The investigation concluded that the Chinese government, through massive subsidies, state-owned enterprise monopolies, and technology transfers, caused unfair competition in the global shipbuilding market, thereby threatening the economic security and supply chain stability of the United States.

The initial proposal by the Trump administration was to impose a "punitive port fee" of up to $1.5 million per port call on all ships built in China, regardless of whether the operators were Chinese companies. However, this proposal faced strong opposition from the global shipping industry and U.S. port operators, who feared it would lead to increased import costs, reduced export competitiveness, and potentially force ships to concentrate on a few major ports, marginalizing others.

Policy Content and Implementation Details

After multiple rounds of hearings and industry consultations, the USTR announced the adjusted "regulatory port fee" policy on April 17, 2025, which will take effect 180 days later, on October 14, 2025. The main contents are as follows:

I. Targets and Rates

1. Ships built and owned by China:

   • Fees are charged per net tonnage each time they enter a U.S. port, starting at $50 per ton in the first year, gradually increasing to $140 over three years.
   • Each ship is charged a maximum of 6 times per year.

2. Ships built in China but not owned by China:

   • Initial rate of $18 per ton, increasing annually to $28.
   • Option to charge based on container count, starting at $120 per container, rising to $250 over three years.

3. Non-U.S. built car carriers:

   • Starting October 14, 2025, charged per Car Equivalent Unit (CEU), starting at $150.

4. Second Phase Measures:

   • Starting in 2028, gradually restrict the use of foreign-built ships for transporting liquefied natural gas (LNG) to promote domestic shipbuilding.

II. Exemptions and Reductions

To minimize the impact on local logistics and exports, the policy includes several exemptions:

• Domestic routes between U.S. ports;
• Regional routes to the Caribbean and U.S. territories;
• Great Lakes shipping;
• Empty ships entering ports to load bulk export goods like coal and grain;
• Shipowners presenting U.S. shipbuilding orders can apply for fee reductions, with the reduction amount capped by the net tonnage of the ordered ships. If the ship is not received within three years, the original reduction will be reclaimed.

Policy Evolution and Industry Reaction

The high punitive port fee proposal initially put forward by the Trump administration was met with strong opposition from global shipping companies, including COSCO, Maersk, and MSC. Industry estimates suggested that if the original plan were fully implemented, it would increase U.S. import costs by over $30 billion annually and could force shipping companies to reduce their frequency of U.S. port calls.

To mitigate the economic impact, the USTR ultimately adopted a tiered, limited, and flexible regulatory approach with multiple exemptions. Despite this, Asian shipping stocks fluctuated after the policy announcement, indicating market sensitivity to future shipping costs and supply chain adjustments.

Policy Implementation and Future Arrangements

According to the USTR announcement, the policy will officially take effect on October 14, 2025, and will be implemented in phases. The first phase involves imposing port fees on ships built in China, while the second phase will extend to restrictions on LNG transport ships. The USTR also stated that future adjustments to rates and applicable scope will be made based on policy effectiveness and industry feedback.

Additionally, the USTR announced a hearing on May 19, 2025, to discuss imposing a 100% tariff on Chinese-made port equipment (such as gantry cranes, container chassis, and parts), further expanding restrictions on the supply chain of China's port infrastructure.

References

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