The U.S. Proposes Charging Up to $1.5 Million for Chinese-Built Vessels Entering Ports

The U.S. Trade Representative’s office has put forth a groundbreaking proposal to charge up to $1.5 million for Chinese-built vessels entering U.S. ports. This move is part of an investigation into China’s significant dominance in the global shipbuilding, maritime, and logistics industries.

Key Findings

The USTR’s report, released on January 16, revealed that China’s share of global shipbuilding tonnage has skyrocketed from 5% in 1999 to over 50% in 2023. This growth is attributed to massive state subsidies and preferential treatment for state-owned enterprises, which have effectively squeezed out international competitors. The report also highlighted the decline in U.S. shipbuilding, with only five ships being constructed annually compared to 70 in 1975.

Following a Federal Register notice published recently, the USTR outlined proposed fees and shipping restrictions, with a public hearing scheduled for March 24 to discuss potential remedies.

Proposed Remedies

The investigation, initiated in April 2024 at the request of several unions, aims to revitalize the U.S. shipbuilding industry. Proposed remedies include port entrance fees of up to $1 million per vessel owned by Chinese maritime transport operators, such as the state-owned China Ocean Shipping Co Ltd.

Non-Chinese maritime transport operators with Chinese-built ships would face fees of up to $1.5 million per port entry, with varying rates based on the percentage of Chinese-built vessels in their fleets. Additional fees could apply to operators with vessels on order from Chinese shipyards.

Additional Measures

In addition to the fees, the proposed remedies require a percentage of U.S. exports to be shipped on U.S.-flagged vessels. This requirement would gradually increase over time, with a long-term goal of having 15% of U.S. goods transported on American-built ships after seven years.

Furthermore, restrictions may be imposed on China’s access to U.S. shipping data and the use of certain software by U.S. port terminals.

Conclusion

The U.S. Trade Representative’s proposal to charge substantial fees for Chinese-built vessels entering ports reflects a strategic effort to address China’s dominance in the maritime industry. By implementing these measures, the U.S. aims to protect its own shipbuilding sector and promote the use of American-built vessels in international trade.

Source: Reuters