Chinese Shipowners Associations Criticize US Trade Proposals

Both the China Shipowners’ Association (CSA) and the China Association of the National Shipbuilding Industry (CANSI) have publicly criticized the US Trade Representative’s proposals to charge extra fees for fleets with Chinese-built tonnage calling at American ports, marking a potential major policy shift in the shipping industry during the early days of Donald Trump’s return to the White House.

The US Trade Representative (USTR) has been investigating China’s increasing dominance in maritime activities, particularly in shipbuilding, over the past year. The USTR report accuses China of artificially suppressed labor costs, forced technology transfer, and intellectual property theft. The recommended measures include potential fees of up to $1.5 million per port call for Chinese-built vessels, $1 million per port call for operators of Chinese-built ships, and mandatory US-flag shipping requirements.

In response, CSA filed a comment on the USTR site, denouncing the proposed actions as discriminatory and in violation of World Trade Organization rules and dispute settlement rulings. The association also cited violations of the 2003 Sino-US Maritime Agreement, US laws, and rules.

Similarly, CANSI opposed the USTR’s proposals, highlighting concerns about the impact on the global shipping industry.

As anticipation of Trump’s potential penalties on Chinese-built tonnage grows, a two-tier market is beginning to emerge. Broker BRS reported that Chinese-linked ships are becoming less attractive for long-term charters due to the uncertainty of potential US port calls. Law firm Hill Dickinson has also noted revisions to charter-party wordings in anticipation of the clampdown on Chinese-built tonnage by the US.

Despite the US government’s intentions to boost the American shipbuilding industry, China’s foreign ministry stated that the proposed measures would not achieve this goal and that China would take steps to protect its rights and interests.

According to Clarksons Research, nearly 37,000 US port calls last year were made by ships connected to China, potentially facing the maximum $1.5 million fee. This represents a significant portion of containership calls but only a smaller percentage of tanker stops.

China has rapidly risen to dominate the global shipbuilding market, holding a two-thirds market share by the end of last year compared to the US’s less than 1% share. The gap between American and Chinese shipbuilding capabilities is attributed to differences in industrial infrastructure, with China’s robust manufacturing base surpassing that of the US.

In conclusion, the escalating tensions between the US and China in the maritime sector underscore broader geopolitical and economic challenges facing the global shipping industry.