U.S. government proposals to impose significant fines on Chinese-built containerships calling at U.S. ports are drawing strong criticism from various business sectors, reports CNBC.
Port Fees
According to the World Shipping Council, an estimated 98% of the global fleet would be subject to U.S. port fees, as the proposed fees apply to both existing Chinese-built vessels and future orders, affecting any carrier with at least one Chinese-built vessel on order. This is an increase from the current 90% of the global fleet that would be subjected to the fee.
Sea Intelligence reports that there were 12,410 port calls made by deep-sea container liner vessels in the U.S. in 2024.
The U.S. Trade Representative is holding hearings on Monday and Wednesday to discuss implementing these penalties. The investigation, initiated under President Biden and concluded in a January report, found that China’s shipbuilding and maritime industry has an unfair advantage. This is now being continued by the Trump administration as part of its broader global economic and trade strategy. President Trump has also announced plans to create a White House shipbuilding office to offer tax incentives to boost U.S. shipbuilding.
Peter Friedmann, executive director of the Agriculture Transportation Coalition, expressed strong opposition to the proposal on behalf of U.S. agriculture exporters. He stated that while they support the objective of fair competition, they cannot accept a plan that would harm U.S. agriculture exports and the communities that depend on them.
Cost Effective Shipping
The Agriculture Transportation Coalition (AgTC) argues that there are currently no U.S.-built vessels suitable for international commercial shipping that can transport agricultural cargo, which includes goods like corn, wheat, grains, and soybeans.
According to Peter Friedmann, the AgTC’s executive director, U.S. exporters would already be using U.S.-built vessels if they were available at a reasonable cost.
He emphasized the narrow profit margins faced by farmers in the global economy and the intense competition for bulk commodities, which necessitate cost-effective shipping options.
Friedmann stated that imposing fees on ocean carriers using Chinese-made vessels would effectively eliminate U.S. agricultural exports, as international buyers are indifferent to the origin of the goods. He said, “The hogs in China couldn’t give a damn where the soybeans come from. You’ve essentially told those exporters you’re out of business.”
The U.S. government has proposed significant levies on Chinese-made ships arriving at U.S. ports as a penalty for ocean carriers using them to transport trade.
Substantial Fees
The U.S. Trade Representative’s (USTR) proposals could result in substantial fees for container ships calling at U.S. ports. For example, a 6,600 TEU containership might face nearly $6,350 in fees per 40-foot container, which is roughly double the current spot rates between New York and Rotterdam.
According to the World Shipping Council (WSC), container vessels serving the U.S. typically visit 3-4 U.S. ports per voyage. The proposed port call fees, ranging from $1 million to $3.5 million per port, could lead to a reduction in U.S. port calls, particularly to smaller and medium-sized ports.
This reduction would have significant negative impacts on port labor, trucking, rail, warehousing, and other related jobs, as well as businesses located near these ports.
John Kramek, testifying before the USTR, warned that these fees would cause congestion at larger ports while reducing service at smaller ones, as vessel operators try to minimize the number of U.S. port calls.
Alan Murphy, CEO of Sea-Intelligence, also predicted that ocean carriers would not only cancel sailings to secondary and tertiary ports and redirect more containers to major ports, but they would also divert containers to Canadian ports to avoid the charges. Sea-Intelligence data shows that there were 1,692 port calls to Canadian ports in 2024.
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Source: CNBC
