US grain and oilseed groups have raised concerns about the US government’s proposal to introduce large fines and restrictions on traders using Chinese-made ships, World Grain reported.
The groups said the proposed fines would impact the grain, feed and oilseeds industries and they suggested alternatives to boost US shipbuilding, the 25 March report said.
The comments were contained in submissions to the Office of the US Trade Representative (USTR), in response to a Section 301 investigation into China’s dominance over global shipping and shipbuilding, and were made by the National Grain and Feed Association (NGFA), North American Export Grain Association (NAEGA), the National Oilseed Processors Association (NOPA), US Wheat Associates (USW) and National Association of Wheat Growers (NAWG).
The USTR has proposed fines of up to US$1.5M for each Chinese-made ship entering a US port, up to US$1M/port call for Chinese operators and up to US$1M for operators with orders from Chinese shipyards.
The plan would also set minimum amounts that carriers should export on US-built, US-flagged vessels, World Grain wrote.
It has been estimated that an additional US$1M fee on vessels carrying agricultural exports would increase costs of most shipments between US$15-40/tonne, equating to about US$0.50-US$1.25/bushel.
Grain and oilseed exports support 450,000 jobs in the USA and add US$174bn to the US economy, according to the groups.
“Though well intentioned, this proposal threatens to impose significant costs on US grain and oilseed exporters and erode America’s competitiveness in the international market,” NGFA president and CEO Mike Seyfert was quoted as saying.
“If enacted, this proposal would effectively eliminate half of the global bulk fleet that we need to export almost one-third of grains and oilseeds that are produced in America. That puts US agriculture at a considerable competitive disadvantage in global markets.”
Since the proposal was put forward, disruptions in the marketplace had already been reported, including lost sales and difficulty contracting ships, Seyfert added.
Of the roughly 21,000 vessels in the world’s bulk shipping fleet, nearly 50% were made in China, according to the report.
At the time of the report, only five operational ships – or 0.2% - of the global fleet were built in the USA.
Container vessels, which were used to export about US$9bn of grain and oilseeds in 2024, were also important to agricultural shippers and would be severely affected by the proposal, Seyfert said.
The NGFA has asked the administration to consider other ways to promote the US maritime industry, such as shipbuilding grants, tax credits and reduced regulations, according to the report.
If the USTR moved forward with proposed penalties, the NGFA said it wanted agricultural commodities to be given an exemption.
“Without an exemption we could see a significant drop in corn, soyabean and wheat exports,” Seyfert said. “That jeopardises the US$65bn trade surplus America enjoys on US grains and oilseeds and hurts all of US agriculture, from exporters to farmers.”
Devin Mogler, president and CEO of NOPA, said that the US grain and oilseeds industry relied on a competitive, efficient and reliable global shipping in an increasingly competitive global export market.
It was crucial that policies increased, and did not restrict, shipments of US commodities, he added.
“While we support efforts to promote US shipbuilding, the proposed penalties would place a disproportionate burden on American farmers, processors and exporters, limiting access to essential shipping capacity and driving up costs ultimately to be shouldered by hard-working American farmers,” Mogler said.
“NOPA urges the administration to explore alternative solutions, such as targeted incentives for domestic shipbuilding, rather than imposing penalties that could disrupt supply chains and harm the entire agricultural sector.”
