The US Trade Representative (USTR)’s office has proposed charging up to US$1.5M for Chinese-built vessels entering US ports as part of its investigation into China’s growing domination of the global shipbuilding, maritime and logistics sectors, Reuters reported.
In a 16 January report, USTR said a probe launched during the administration of former President Joe Biden found that China had increased its share of global shipbuilding tonnage from 5% in 1999 to over 50% in 2023 due to massive state subsidies and preferential treatment for state-owned enterprises that were squeezing out private sector international competitors.
The proposed charges would add to supply chain uncertainty and raised a range of complicated questions, such as how the fees would affect a China-linked bulk carrier or tanker that arrived empty to load American grain or crude oil for export, John McCown, an analyst with the Center for Maritime Strategy, said in a 24 February FreightWaves report.
“It doesn’t appear as though the administration has really thought this through,” McCown added.
“What happens to an empty Panamax vessel that arrives to load grain from the Midwest? With the fees, we’re suddenly less competitive than Brazil.”
The USTR proposals were published in a Federal Register notice on 21 February, the 24 February Reuters report said.
They include port entrance fees of up to US$1M/vessel owned by Chinese maritime transport operators, such as state-owned China Ocean Shipping Co. Alternatively, the USA would charge US$1,000/tonne of a vessel’s cargo capacity.
Non-Chinese maritime transport operators operating Chinese-built ships would pay up to US$1.5M for each port entry, according to the notice.
Those with more than 50% Chinese-built fleets would pay US$1M for each vessel entry, regardless of origin. The fee would fall to US$750,000 if the Chinese fleet percentage was between 25% and 50% and to US$500,000 if below 25%.
A second set of fees in similar amounts could apply to maritime operators with vessels on order from Chinese shipyards to be delivered over the next two years, Reuters wrote.
USTR said that under the proposal the fees could be refunded by up to US$1M for each entry into a US port by a US-built vessel employed in international maritime services.
The remedies would also require at least 1% of US exports to be shipped on US 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% of exports after two years and 5% after three years. After three years, 3% of US exports would have to be shipped on American-built ships.
After seven years, the restrictions would require at least 15% of US goods to be transported on US-flagged vessels, with 5% on American-built ships.
USTR also recommended restricting China’s National Transportation and Logistics Public Information Platform access to US shipping data or banning US port terminals from using LOGINK software.
The agency is due to have a public hearing on its proposals on 24 March.
