The shipping industry has experienced a temporary reprieve with the announced suspension of US and Chinese port fees, though the official implementation still awaits final regulatory action. The White House confirmed a one-year suspension of US port fees starting November 10, contingent on a reciprocal suspension by China.
Implementation and Regulatory Hurdles
The suspension hinges on a final, documented agreement, which Treasury Secretary Scott Bessent suggested could be signed soon. The US Customs & Border Protection (CBP) currently lacks the authority to pause the fees unilaterally and must await a revised rule from the US Trade Representative (USTR). Seward & Kissel partner Brian Maloney noted that the public comment period on the USTR’s Section 301 port fee rules closes on November 10, the same day the suspension is scheduled to begin, suggesting formal regulatory language will likely follow immediately.
Implications of the Pause
The specific November 10 deadline has raised the possibility of ship operators delaying US port arrivals to avoid millions in fee costs, a logical choice “if a ship had that option,” according to Kathy Metcalf of the Chamber of Shipping of America.
A key unanswered question remains regarding retroactive refunds for fees paid between the implementation date of October 14 and the suspension date of November 10. While Metcalf suggests checking with local CBP or Chinese port collection offices, both she and Maloney are skeptical that refunds will be offered.
The Vehicle Carrier Sector Uncertainty
The heavily impacted vehicle carrier sector faces particular uncertainty. The high fees for this segment, which were raised and applied to all foreign-built vehicle carriers (not just Chinese-built ones, which make up only 12% of the US-calling fleet), are covered under Annex III of the USTR port fee rule.
- Conflicting Views on Scope: Kathy Metcalf believes the White House fact sheet implies a suspension of all five annexes, including Annex III. However, Brian Maloney is less certain, noting the careful wording of the fact sheet, which refers to suspending all “responsive actions.” Maloney states he is in “wait-and-see mode” for the formal language to confirm Annex III’s inclusion.
- High Financial Impact: For large vessels, the US port fee equates to about $1 million per call (capped at five calls per year). Höegh Autoliners previously estimated the cost at $60 million to $70 million annually if fees were not suspended.
- Relief and Contract Renewal: Assuming Annex III is suspended, the one-year pause offers a critical window for vehicle carrier operators to delay this financial exposure and potentially renew long-term customer contracts to allow the fee burden to be passed on.
Shipping as a Trade Pawn
The on-again, off-again nature of the port fees, now established as a bargaining chip in broader US-China trade talks, introduces significant predictability risk for the shipping industry. As Metcalf noted, the lack of certainty over operating costs is undesirable, and while the industry supports the pause, it does not want to be a “pawn in the trade war.”
Furthermore, the temporary suspension complicates the original purpose of the high vehicle carrier fee, which was to incentivize operators to order US newbuilds to revitalize the domestic shipbuilding sector for military sealift purposes. A temporary, politically-driven fee may undermine the long-term calculus for US newbuild orders.
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Source: Lloyd’s List
