The United States has unveiled plans to impose new port fees on Chinese ships, saying it aims to revive American shipbuilding against China’s dominance in the industry.
The initial February proposal suggested fees up to $1.5 million per port call, which generated concern within the global shipping industry.
The revised policy
The revised policy exempts vessels servicing the Great Lakes, the Caribbean, and U.S. territories from these fees. U.S.-based carriers Matson and Seaboard Marine, as well as empty ships arriving to load U.S. exports, will also be exempt.
The Federal Register notice
The Federal Register notice posted by the US Trade Representative (USTR) on Thursday said the US government will charge fees on all Chinese-built and -owned ships docking in US ports based on net tonnage or goods carried on each voyage.
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The new fees
The new fees will be enforced in around 180 days’ time, rolled out in a phased manner, and may be raised in coming years, according to the USTR notice.
Backtracks from proposals floated in February
The latest announcement backtracks from proposals floated in February to charge China-built ships of up to $1.5 million per port call, which had prompted a widespread industry backlash, Reuters reported.
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Ships and shipping
“Ships and shipping are vital to American economic security and the free flow of commerce,” US Trade Representative Jamieson Greer said in a statement
Fees will be applied once per voyage,
Fees will be applied once per voyage, with a maximum of six times annually for affected ships.The USTR has opted for fees based on net tonnage ($50 per net ton, increasing by $30 annually for three years for Chinese-built and owned ships) or per container unloaded ($120 per container, rising to $250 after three years), whichever is higher.
Chinese-built ships
Chinese-built ships owned by non-Chinese firms will be charged $18 per net ton, with annual increases of $5 over the same period.
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Hold a hearing on May 19
The Trump administration’s actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.” The USTR will hold a hearing on May 19 to discuss proposed tariffs on ship-to-shore cranes (potentially 100%), chassis, and chassis parts.
American and Canadian vessels
Whereas American and Canadian vessels calling at Great Lakes ports have received a reprieve. Foreign roll-on/roll-off auto carriers may be eligible for fee refunds if they order or take delivery of a U.S.-built vessel of equivalent capacity within three years.
Liquefied natural gas (LNG) carriers
Liquefied natural gas (LNG) carriers face a phased-in requirement to move 1% of U.S. LNG exports on U.S.-built, operated, and flagged vessels within four years, increasing to 4% by 2035 and 15% by 2047.
The implementation of the levies
The implementation of the levies will occur in 180 days. The USTR will not impose fees based on the percentage of Chinese-built ships in a fleet or on prospective orders.
A sweeping trade war
It is noteworthy that President Donald Trump has embarked on a sweeping trade war with China, a move his administration portrays as a bid to bring manufacturing back to the US but that critics and many economists fear could trigger a global recession and increased prices for consumers.
