U.S. Reduces Port Fees for Ships from China Following Industry Criticism

In a significant shift, the U.S. administration announced new measures on Thursday aimed at alleviating the financial burden on domestic exporters and vessel operators serving key regions such as the Great Lakes, the Caribbean, and U.S. territories. This decision comes in response to widespread industry concerns regarding previously proposed fees for vessels constructed in China.

The U.S. Trade Representative revealed a revised plan that scales back earlier proposals that would have imposed port fees of up to $1.5 million per visit for Chinese-built ships. Such fees had raised alarms throughout the global shipping sector, as they potentially threatened U.S. export competitiveness and could have resulted in an estimated $30 billion increase in annual import costs for American consumers.

U.S. Trade Representative Jamieson Greer emphasized the importance of shipping to national economic security, stating that the recent changes are intended to counteract China's dominance in shipbuilding and address vulnerabilities in the U.S. supply chain. These revisions come amidst escalating trade tensions between the U.S. and China, particularly as the U.S. administration seeks to engage China in discussions regarding new tariffs imposed on a variety of Chinese goods.

The updated fee structure addresses critical feedback from a diverse array of stakeholders in the maritime industry, including U.S. shipping companies and domestic port operators. The USTR has made allowances that exempt certain vessels from the proposed fees, acknowledging that U.S. shipbuilders currently produce only a limited number of vessels each year compared to China.

Specifically, ships operating exclusively between U.S. ports or those transporting goods to U.S. territories and Caribbean islands will be exempt from the fees. This exemption also extends to empty vessels arriving in the U.S. for the purpose of loading exports. Additionally, foreign auto carriers that plan to acquire U.S.-built vessels may be eligible for refunds on fees paid.

For liquefied natural gas (LNG) carriers, a gradual implementation plan has been established, requiring these vessels to transport an increasing percentage of U.S. LNG exports on U.S.-built ships over the next two decades.

The USTR will implement the new fees in 180 days, applying them to each qualifying voyage, with a cap of six charges per year per vessel. The revised fee structure will be based on net tonnage or container unloading rates, rather than a flat fee, which had caused concern among larger shipping lines.

Starting on October 14, Chinese-built vessels will incur a fee of $50 per net ton, increasing by $30 annually for three years. This fee will apply unless a different calculation method based on container discharge yields a higher charge. Non-Chinese owned ships built in China will face a lower fee of $18 per net ton, with annual increases of $5.

The announcement coincides with the one-year mark of the USTR's investigation into China's maritime practices, which concluded earlier this year that China employs unfair policies to dominate the global shipping market. The bipartisan support for the initiative reflects a collective acknowledgment of the need to bolster U.S. shipbuilding standards and enhance naval capabilities.

Labor unions representing American workers have voiced their support for the measures, expressing readiness to collaborate with the USTR and Congress to revitalize domestic shipbuilding and create quality employment opportunities. However, the American Apparel & Footwear Association has criticized the port fees, arguing they will likely lead to higher prices for consumers and reduced trade.

A hearing set for May 19 will address proposed tariffs on equipment essential for port operations, including ship-to-shore cranes, as the U.S. continues to evaluate its trade relationship with China.