The U.S. Trade Representative (USTR) is poised to announce a final plan imposing substantial port fees on ships linked to China, a move aimed at countering China's dominance in global shipping and revitalizing the U.S. shipbuilding industry. This announcement coincides with the first anniversary of the USTR's investigation into alleged unfair Chinese maritime practices.

The proposed fees, which could reach up to $1.5 million per port call for Chinese-built vessels, have sparked significant debate. While the initiative aligns with President Donald Trump's strategy to rejuvenate domestic shipbuilding, industry stakeholders express concerns about potential disruptions to supply chains and increased costs for U.S. importers and exporters.

Background on USTR's Investigation

On April 17, 2024, the USTR initiated a Section 301 investigation in response to petitions from labor unions, including the United Steelworkers and the International Association of Machinists and Aerospace Workers. The investigation focused on China's policies in maritime, logistics, and shipbuilding sectors. Findings released on January 16, 2025, concluded that China's dominance in these sectors is unreasonable and burdens U.S. commerce.

Details of the Proposed Port Fees

In February 2025, the USTR proposed imposing significant port service fees on Chinese-built vessels and operators. The proposed fees included up to $1 million per U.S. port call for ships operated by Chinese companies and up to $1.5 million per port call for Chinese-built vessels. Additionally, a service fee was suggested for each U.S. port call by vessel operators with orders from Chinese shipyards.

Industry Response and Concerns

These proposals have faced substantial pushback from various industry stakeholders, including U.S. exporters, importers, port operators, and shipbuilders. Critics argue that the fees could harm domestic supply chains and infrastructure investments, particularly affecting small-to-medium ports and the U.S. entities they serve. Industry leaders have expressed concerns that the proposed fees might redirect shipping traffic, overburden major ports, and underutilize facilities built through public investment.

The American Trucking Associations (ATA) has sounded the alarm on the potential impact of the U.S. government's proposed port fees on Chinese-built and operated vessels. Bob Costello, chief economist at the ATA, warned that these fees could significantly alter freight patterns in the U.S., leading to higher costs and operational disruptions for the trucking industry.

The International Chamber of Shipping (ICS), representing over 80% of the global merchant fleet, warns that the proposed fees could severely disrupt U.S. trade and increase consumer prices. Current data shows China builds 61% of the world’s new merchant vessels, with the proposed fees potentially affecting 98% of container ships calling at U.S. ports.

Potential Economic Implications

The proposed port fees aim to counteract China's dominance in global shipping and support the revitalization of the U.S. shipbuilding industry. However, the potential economic disruptions have raised concerns among various stakeholders. For instance, U.S. farmers have expressed dismay over the proposal, fearing that increased shipping costs could harm agricultural exports and reduce competitiveness in global markets.

The American Association of Port Authorities (AAPA) warned that the fee structure would do little to counter China's dominance in shipbuilding and said that it would have few near-term effects on domestic shipyard production. "A fee on foreign vessels will simply not bring back American shipbuilding. Our existing shipyards are working at or near capacity, and higher demand for American vessels will not enable them to produce more ships with the same resources," said Cary Davis, AAPA president and CEO.

Historical Context

China's share of the global shipbuilding industry has risen dramatically, from 5% in 2000 to over 50% in 2023, while the U.S. share has fallen below 1%. This shift has prompted bipartisan efforts to address challenges in the U.S. shipbuilding sector and counter China's industrial policies.

Policy Adjustments and Timeline

Due to industry pushback, USTR officials have indicated that not all proposed fees will be implemented, and they may not be cumulative. USTR is carefully considering public comments and testimony from hearings held in late March 2025. Consequently, the timeline for implementation may extend to November, as the government continues to weigh adjustments to mitigate economic disruptions while pursuing its strategic maritime goals.

Conclusion

The USTR's anticipated announcement of port fees on China-linked ships represents a significant policy move aimed at revitalizing the U.S. shipbuilding industry and countering China's dominance in global shipping. While the initiative aligns with strategic economic goals, it has sparked considerable debate among industry stakeholders regarding its potential impact on domestic supply chains and infrastructure investments. The final plan's details and implementation timeline are expected to be clarified in the forthcoming USTR announcement.