Posted on March 3, 2025
A proposal from the United States Trade Representative’s (USTR) office that would charge Chinese ships up to $1.5 million to call at U.S. ports could disrupt ocean carriers and potentially cause headaches for shippers and end consumers alike.
The hawkish measure from the USTR office was recommended after a months-long probe into China’s maritime, logistics and shipbuilding practices, spurred on by complaints from five separate unions of the country’s “unfair, non-market policies.”
That investigation concluded that China’s dominance of the sectors was “unreasonable” under Section 301 trade laws, enabling the U.S. to hit the country with a monetary penalty.
The proposal serves as an extension of the recent 10 percent additional duties on Chinese imports enacted by President Donald Trump—in yet another escalation of the Commander in Chief’s trade war with China.
Under the USTR’s recommendation, vessels operated by Chinese companies would either pay up to a $1 million service fee per ship calling at a U.S. port, or pay up to $1,000 per net ton of the vessel’s capacity.
This would directly impact Cosco Shipping and its subsidiary, Orient Overseas Container Line (OOCL), which made over 1,300 U.S. port calls over the last 12 months, according to data from S&P Global Market Intelligence.
According to container shipping analysis firm Linerlytica, about 17 percent of U.S. container imports from the Far East come on Chinese carriers.
However, the situation gets murky beyond the fees levied against Chinese-operated ships.
For example, any vessel operator stopping at a U.S. port with a Chinese-built ship would have to pay up to $1.5 million per port call, depending on the percentage of Chinese-built vessels they have in their fleet.
Beyond that, carriers would be charged up to $1 million per port call if more than 50 percent of their newbuilding orders are with Chinese shipyards.
John McCown, a container shipping expert and senior fellow at the Center for Maritime Strategy, said the sweeping proposal looks like it would apply in some way to almost every port call in the U.S. by any container ship.
“Obviously there needs to be much more clarity on who initially pays the fee, precisely what ships it will be applied to and what constitutes a China-built ship,” McCown told Sourcing Journal. “What about drydock work in China? Are charterers or owners responsible? Does flag or actual vessel ownership matter? This is nothing less than another form of tariffs and in its bluntness is even more nonsensical than the complex proposed reciprocal tariffs.”
According to freight rate benchmarking platform Xeneta, major container shipping fleets are currently sourcing most of their upcoming vessel orders from China.
For example, 24 percent of current cargo ships at Mediterranean Shipping Company (MSC) were built in China, while 92 percent on its orderbook are currently being built there. Twenty-one percent of Hapag-Lloyd’s active fleet was built in China, with 89 percent on order from the shipbuilding titan.
At CMA CGM, 41 percent of the French ocean carrier’s active fleet was constructed in China, as will 53 percent of its future ships in the pipeline.
China also produced 27 percent of the current vessels operated by Ocean Network Express (ONE), and is set to manufacture 56 percent of the carriers orderbook.
“This will hit all carriers,” stressed Peter Sand, chief analyst at Xeneta.
Sand told Sourcing Journal that U.S. exporters and importers will end up being the most impacted by any possible port fees or restrictions.
“While the intent can be read as a blow to China, it will instead be a more expensive and cumbersome affair for U.S. importers. It’s another move that shows the U.S.’ single-minded focus on China,” Sand said, citing that the move weaponizes trade. “Our customers are watching every word that comes out of the U.S. They are keeping their options open and being patient.”
This “will probably have to be passed onto shippers as a surcharge in some form,” said Roach.
Since the fees apply to both exports and imports that weren’t already targeted by tariffs, that inevitably amounts to more potential costs that would be passed on to American consumers, McCown noted.
“Furthermore, this would result in a shift of container movements north to Canada and south to Mexico, both adding costs and taking away economic activity from dockworkers and other U.S. supply chain workers,” McCown said. “This proposal is in neither the best economic nor national security interest of the U.S. and is using a sledgehammer with all sorts of adverse consequences. A much better approach is to measure twice and cut once, with any cutting being done by a scalpel.”
The recommendation seeks to set aside 1 percent of U.S. exports this year to vessels run by U.S. operators. The restriction would increase over time so that in seven years, 15 percent of exports would need to move on U.S.-flagged vessels, including 5 percent on U.S.-built vessels.
Nevertheless, the biggest potential beneficiary of the suggested Section 301 penalties likely wouldn’t be an American stakeholder.
“If this USTR proposal goes through, then it would be in favor of South Korea and Japanese shipbuilders, which have the experience and capacity to ramp up construction and regain some of the market share it has lost to China over the past 15 years,” Roach said.
However, the upcoming orderbook fleets paint a different picture. China leads the way at 69.9 percent, while both South Korea (23.6 percent) and Japan (4.9 percent) have halved from the current fleet capacity.
Similarly, Taiwanese and Korean carriers—including Evergreen, Yang Ming and HMM—would benefit from the move as only a small proportion of their fleet are Chinese-built.
The proposal does not represent official policy until the Trump administration determines whether the new fees will be imposed. The USTR office opened up comments from the public on the proposed Section 301 actions, and will host a public hearing about the suggestions on March 24.
