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The Trump administration is proposing a levy of up to $1.5 million per port call on Chinese-built ships entering U.S. ports.
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The move aims to boost U.S. shipbuilding but could disrupt coal, oil, LNG, and agricultural exports.
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Industry leaders warn the levy could halt coal exports within 60 days and increase transportation costs by up to $930 million annually for agriculture.
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The proposal faces criticism for being impractical, as most global cargo ships are built in China, while the U.S. lacks a comparable fleet.
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The policy could undermine U.S. energy and trade goals despite previous efforts to streamline exports and reduce regulatory hurdles.
The Trump administration is considering an executive order that would impose fines of up to $1.5 million per visit on Chinese-built ships calling at U.S. ports. The plan is designed to support America’s struggling shipbuilding industry by penalizing the widespread use of Chinese vessels, which dominate the global fleet. The administration accuses China of engaging in unfair trade practices in the shipbuilding sector.
Tariff Escalation Fuels Global Trade Tensions
This proposal follows a recent decision by the U.S. to impose a minimum 10% tariff on all imports from 90 countries. China has been the most impacted, now facing tariffs totaling nearly 65% after retaliatory moves by Beijing, including levies on U.S. goods and restrictions on rare earth mineral exports. The escalating economic confrontation is shaking global markets.
Coal Exports in Jeopardy
Despite previous efforts to support the coal sector, the proposed levy could severely hurt it. Xcoal Energy & Resources CEO Ernie Thrasher warned that the fees could stop U.S. coal exports within 60 days, with costs rising by 35%, rendering American coal uncompetitive. Unsold coal inventories are accumulating, and mine closures and job losses may follow.
Energy Exports Also at Risk
The American Petroleum Institute has raised concerns that the levy could obstruct the export of oil, LNG, and refined fuels. The plan includes a requirement that 20% of U.S. exports be carried on U.S.-built and U.S.-flagged ships—an unrealistic goal given that no such LNG carriers currently exist, according to BIMCO. This would directly hinder one of the administration’s major energy goals: to expand American energy exports.
Agricultural Sector Faces Shipping Challenges
The proposed policy is also affecting U.S. agricultural exporters. Grain traders have reported difficulty securing ocean freight, limiting sales of corn, soybeans, and wheat. The American Farm Bureau estimates that transportation costs for bulk agricultural products could surge by $372 million to $930 million annually. In 2024, the U.S. exported over $64 billion worth of such products.
Logistical Hurdles and Global Shipbuilding Realities
The U.S. fleet is ill-equipped to take on the cargo burden if foreign-built ships are penalized. Fewer than 200 U.S.-flagged cargo ships exist, and even fewer are U.S.-built. Meanwhile, China has become the world’s dominant shipbuilder, producing over 80% of container ships and 75% of bulk carriers, compared to just 5% two decades ago. In stark contrast, American shipyards account for less than 0.01% of commercial cargo ship production by tonnage, focusing mostly on military vessels.
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Source: Crude Oil Prices Today
