Looming U.S. port fees on Chinese ships could backfire, disrupt global trade, experts warn

Industry experts have warned that a potential U.S. port fee policy targeting Chinese-linked vessels could backfire, harming the U.S. economy and severely disrupting global shipping.

According to a proposal by the U.S. Trade Representative (USTR), the policy would impose service fees on three categories of maritime operators: those based in China, those with fleets primarily composed of Chinese-built vessels, and those with pending orders for Chinese ships within the next 24 months.

Chinese maritime transport operators will be charged at a rate of up to $1 million per entrance of any vessel to a U.S. port on international maritime transport, maritime transport operators with fleets comprised of Chinese-built vessels will be charged from $500,000 to $1.5 million, and maritime transport operators which have prospective orders for Chinese vessels in the next 24 months will be charged from $500,000 to $1 million.

The three-layered fee policy not only covers Chinese-built ships in service and shipbuilding orders for the next 24 months, but also applies to any vessel in a fleet with a Chinese-built ship, regardless of whether the specific vessel making the port call was built in China.

To avoid the fees in the current proposal, vessel operators must be based outside of China, have fleets with fewer than 25 percent of ships built in China, and have no Chinese shipyard orders or deliveries scheduled within the next two years. However, given China's dominant share in global shipbuilding, those conditions appear unrealistic for most international operators.

Numbers talk

China last year led the world in contracting, order book and delivery of vessels, three major indicators in global shipbuilding, according to data published by the Ministry of Industry and Information Technology.

Chinese shipbuilders completed construction of 55.7 percent of global orders in 2024, received 74.1 percent of new orders and accounted for 63.1 percent of the world's hand-held vessel orders, representing year-on-year growth of 13.8 percent, 58.8 percent and 49.7 percent respectively.

China now produces more than half of the world's cargo ships by tonnage, up from just 5 percent in 1999, followed by Japan and South Korea, USTR figures showed. Last year, U.S. shipyards built just 0.01 percent of the total.

The USTR proposal also seeks to shift domestic exports to ships that are both flagged and built in the United States. However, the current fleet of U.S.-flagged cargo vessels numbers less than 200, and not all are U.S. built.

Very few maritime operators will be able to document that their annual share of U.S. exports meets the required 20 percent carried on U.S. built, U.S. flagged vessels, according to shipping association Bimco.

Imran Khalid, geostrategic analyst and columnist on international affairs, told the South China Morning Post that the "Trump administration's romantic vision of reviving American shipbuilding ignores fundamental economic realities."

"Rebuilding a competitive commercial shipbuilding industry requires decades and tens of billions of dollars in sustained subsidies to approach anything resembling Chinese economies of scale," Khalid said.

Devastation 

The proposal is up for consultation and discussion and has already drawn criticism from many companies and business sectors, including the U.S. maritime industry and agriculture producers. 

It has sent a shockwave through the domestic maritime industry. "National interest will not be served if the effort to boost American shipbuilding unintentionally destroys American-owned carriers," Edward Gonzalez, CEO of Florida-based Seaboard Marine, the largest U.S.-owned international ocean cargo carrier, told Reuters.

Like many U.S. operators, Seaboard relies on vessels made in China. It has 16 China-built ships in its fleet of 24 vessels, according to maritime data provider Alphaliner.

U.S. vessel operators said the fees on Chinese-linked vessels also would push more U.S. cargo to foreign-owned ocean shipping companies that have resources to better weather the change.

The maritime industry in the U.S. is not alone. The agriculture industry, which is already getting pummeled by the Trump administration's recent tariffs, is also expected to suffer.

U.S. Census Bureau Trade data showed that the country exported more than $64 billion in bulk crops, bulk animal feed and vegetable soils in 2024.

With the potential port fees, bulk agricultural exporters could face an additional $372 million to $930 million in annual transportation costs from the fees, according to the American Farm Bureau Federation.

Beyond the U.S., shipping firms worldwide will also be hit by the potential fees. The World Shipping Council estimates the potential U.S. fees could add $600-800 per shipping container – doubling the spot rates on some critical trade routes.

Major shipping lines like MSC, Maersk and CMA CGM – whose fleets consist of 20 to 41 percent Chinese-built vessels – are preparing operational changes to mitigate the financial impact.

MSC CEO Soren Toft warns the proposed fees could cost the industry $20 billion, forcing carriers to either abandon smaller U.S. ports or impose massive surcharges.

(With input from agencies)