Importance Score: 75 / 100 🔴
United States Imposes New Port Fees on Chinese Vessels
Washington has introduced new port fees targeting ships constructed and operated by China, aiming to bolster the domestic shipbuilding sector and diminish China’s preeminence in global maritime trade. This measure, initiated following an investigation under the previous administration, arises amid ongoing trade tensions between the US and China, potentially heightening economic friction.
Rationale for Port Fee Implementation
“Maritime shipping is essential to American economic security and the unhindered flow of commerce,” stated US trade representative Jamieson Greer in a Thursday announcement detailing the new fees, which are primarily scheduled to take effect in mid-October. “The current administration’s actions are designed to start countering Chinese leadership, mitigating risks to the US supply chain, and signaling demand for vessels built in the United States.”
Details of the New Port Fee Structure
Under the newly established regulations, fees will be levied per net ton or per container on each China-linked vessel’s voyage to the US. Importantly, these fees are applied per voyage, not at each individual port as initially anticipated by some industry stakeholders.
- Fees will be assessed up to five times annually per vessel.
- A waiver can be granted if the vessel owner places an order for a US-built ship.
US Shipbuilding and Global Landscape
The US shipbuilding industry, once dominant after World War II, has experienced a gradual decline, now representing a mere 0.1% of global production. Currently, Asia leads the sector, with China constructing nearly half of all ships launched worldwide. South Korea and Japan follow, with these three nations collectively accounting for over 95% of civil shipbuilding, according to United Nations data.
Differentiation in Fees
Separate fee structures will be implemented for Chinese-operated and Chinese-built ships, with both sets of fees scheduled to increase incrementally in subsequent years.
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Fees for Chinese-Built Ships
For vessels constructed in China, the initial fee is set at $18 per net ton (NT) or $120 per container. To illustrate, a ship carrying 15,000 containers could incur a fee of $1.8 million.
Industry Concerns and Potential Impact
Industry groups representing 30 sectors in the US had previously expressed apprehension in March regarding the potential for such fees to inflate the prices of imported products.
Retail Sector Apprehensions
One business surveyed by these groups voiced concern that the proposed fees, in conjunction with existing tariffs on goods from China and other nations, as well as duties on steel and aluminum imports, would place “considerable pressure on US retailers.”
Expansion to Other Vessel Types
Fees will also be applied to all non-US built car carrier vessels, commencing within 180 days. Furthermore, Washington is set to introduce new fees for liquified natural gas (LNG) carriers, although these will not take effect for another three years.
Exemptions to the New Fees
According to an accompanying fact sheet, certain shipping activities are exempt from the new fees:
- Shipping within the Great Lakes region.
- Shipping within the Caribbean region.
- Shipping to and from US territories.
- Bulk commodity exports on ships arriving in the United States empty.
Further Trade Measures
In addition to the port fees, Ambassador Greer also announced proposed tariffs targeting specific equipment, including ship-to-shore cranes and Chinese cargo handling equipment.