American Seaports Push Back Against Proposed Fees on Chinese-Built Shipping

America’s seaports have raised concerns over the Trump administration’s proposed steep fees on Chinese-built shipping, which could potentially add up to an extra $3.5 million per port call if fully enforced. The American Association of Port Authorities (AAPA) recently submitted comments to the Office of the United States Trade Representative (USTR), highlighting the detrimental impact these fees could have on U.S. exports and the overall competitiveness of the shipping industry.

AAPA’s president and CEO, Cary Davis, emphasized that the proposed fee structure would do little to address China’s dominance in shipbuilding and would not lead to a significant increase in domestic shipyard production. Instead, Davis suggested alternative support policies like the SHIPS Act as more effective solutions.

Following the USTR’s announcement of the fee proposal, AAPA participated in a comprehensive study conducted by Trade Partnership Worldwide to assess the potential repercussions. Initial findings indicate a substantial decline in American exports due to increased shipping costs, with agricultural exports projected to decrease by 16 percent, petroleum and coal exports by eight percent, and overall U.S. goods exports by 12 percent if the fees are fully implemented.

Considering that U.S. goods exports amount to approximately $2.1 trillion annually, a 12 percent decline could result in a revenue loss of around $250 billion per year for U.S. exporters, equivalent to one percent of the country’s GDP.

Impact on Port Infrastructure and Economic Growth

The implementation of the proposed fees could also have adverse effects on smaller secondary ports, potentially undermining federal investments in channel deepening and port infrastructure in midsize seaports along the Gulf and East Coasts. AAPA urged the USTR to reconsider its approach and explore more targeted strategies to address Chinese dominance in the global shipbuilding industry.

The Louisiana Maritime Association (LaMA) echoed similar concerns, emphasizing the potential negative impact on American maritime workers and related industries. The association warned that the anticipated consequences of the USTR’s action could lead to a decline in business for railroads, pilots, towage companies, and various small businesses dependent on the shipping industry.

BIMCO’s Analysis of Port Fees

Shipping association BIMCO also provided insights into the potential effects of the proposed fees, highlighting the increased transport costs on U.S. imports and exports and the broader negative implications for the American economy. BIMCO’s deputy secretary general, Lars Robert Pedersen, cautioned against the potential segregation of the global shipping market and the resulting rise in maritime trade costs.

Pedersen predicted a split in the market, with some shipowners opting for non-Chinese fleets to avoid U.S. penalties, while others would continue using Chinese tonnage for global trade outside the U.S. market. This segregation could lead to higher overall costs in maritime trade and increased congestion at major trade gateways, with smaller ports facing underutilization.

Furthermore, a U.S.-built requirement for export shipping could significantly raise costs for American exporters, particularly impacting industries like agriculture. The affordability of commodities such as grain and soy would be severely affected, posing challenges for U.S. competitiveness in the global market.