- Steep US port fees to discourage the use of Chinese vessels.
- USTR to hold a March 24 hearing on fees and shipping restrictions.
- US shipbuilding has seen a steep decline since the 1970s.
- Trump trade team follows up on the shipping probe that started under Biden.
Reuters reports that the U.S. Trade Representative (USTR) has proposed imposing fees of up to $1.5 million on Chinese-built and Chinese-operated vessels entering U.S. ports.
This initiative aims to counteract China’s significant expansion in the shipbuilding industry, which has seen its global share rise from 5% in 1999 to over 50% in 2023, largely due to state subsidies and preferential treatment for state-owned enterprises.
Proposed remedies
The proposal outlines several measures:
- Fees on Chinese Maritime Operators: Chinese-owned shipping companies, such as COSCO, would face charges of up to $1 million per vessel for each U.S. port call, regardless of the ship’s construction origin.
- Fees on Chinese-Built Vessels: Operators of ships constructed in Chinese shipyards, even if the operators are non-Chinese entities, could incur fees up to $1.5 million per port call. The exact amount would depend on the proportion of Chinese-built ships within their global fleet.
- Incentives for U.S.-Built Vessels: The plan proposes financial incentives for operators utilizing U.S.-built ships, potentially offering refunds of up to $1 million per port entry for such vessels.
- Export Shipping Requirements: A phased mandate would require a growing percentage of U.S. exports to be transported on U.S.-flagged and U.S.-built vessels, starting at 1% and increasing to 15% over seven years.
These measures are part of a broader strategy to revitalize the U.S. shipbuilding industry, which has experienced a decline from producing 70 ships in 1975 to just five in recent years.
A public hearing is scheduled for March 24 to discuss the proposed actions and gather feedback from stakeholders.
U.S. vessel requirements
The remedies also would require at least 1% of U.S. exports to be shipped on U.S. flagged-vessels for the first two years, including capital goods, consumer goods, agricultural products, and chemical petroleum and gas products.
The percentage would increase to 3% U.S. exports after two years, and 5% after three years. After three years, 3% of U.S. exports would have to be shipped on American-built ships.
After seven years, the restrictions would require at least 15% of U.S. goods to be transported on U.S.-flagged vessels, with 5% on American-built ships.
USTR also said that it recommends restricting access to U.S. shipping data for China’s National Transportation and Logistics Public Information Platform or banning U.S. port terminals from using LOGINK software.
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Source: Reuters
