On Feb. 21, the Office of the United States Trade Representative (USTR) said in a news release it is proposing "to impose certain fees and restrictions on international maritime transport services related to Chinese ship operators and Chinese-built ships, as well as to promote the transport of U.S. goods on U.S. vessels."

USTR said, "In this Section 301 investigation, USTR found that China's targeting for dominance burdens or restricts U.S. commerce by undercutting business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors; restricting competition and choice; creating economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the U.S. economy; and undermining supply chain resilience."

Needless to say, the U.S. maritime industry is up in arms given that the fees include, "up to $1 million per call for a Chinese-operated vessel, based on a rate of $1,000 per net ton of capacity; from $500,000 to $1.5 million per call depending on how many Chinese-built vessels are in an operator's fleet; from $500,000 to $1 million per call for operators with vessels on order at Chinese shipyards," according to FreightWaves. In fact, some in the industry are calling it another form of a tariff.

Jay O'Neil, of HJ O'Neil Commodity Consulting, told DTN, "If the threatened tax on Chinese ships visiting U.S. ports goes into effect, the financial impact the two-tier tax on a typical Panamax Dry Bulk shipment of corn, wheat, or soybeans or DDGS or soybean meal would add between $16.00/Mt and $24.00/Mt to U.S. grain shipments. This would provide a huge advantage to Brazilian grain exports and greatly harm U.S. farmers."

Maritime Historian Salvatore R. Mercogliano, Ph.D., told DTN, "The biggest sector that will be hit is the container. The bulk sector has room to absorb the additional tariffs or taxes. Containers will be more difficult, especially if the Red Sea reopens and rates drop faster than they are. The biggest issue is uncertainty as whether or not the Trump administration will actually impose them. They have been using such issues as leverage in other negotiations."

"For agriculture, it will be a matter of getting cargo onboard ships as soon as possible to beat any rates and then seeing how harvests in other countries can compete against U.S. grain that may have a larger transportation cost levied on it."

Executive Director of the Agriculture Transportation Coalition Peter Friedmann said in an AgTC briefing email on Feb. 26, 2025, "Agriculture is high volume and low margin, the dramatic costs that this proposal would impose on U.S. ag exports, would simply make our U.S. ag unaffordable and noncompetitive in the global markets. We wouldn't be exporting, so would not be shipping. No demand for ships regardless of where built, no demand for U.S. flag ships with U.S. maritime labor, no demand for ships built in U.S. shipyards." See that here: https://agtrans.org/… .

USTR is inviting comments from any interested person on proposed Section 301 actions aimed to obtain the elimination of China's acts, policies, and practices targeting the maritime, logistics, and shipbuilding sectors for dominance. USTR will hold a public hearing about the proposed actions on March 24, 2025, in the main hearing room at the International Trade Commission. The deadline to submit a request to appear at the hearing is March 10, 2025. The deadline for submission of comments is March 24, 2025.

USTR press release and information on where to comment and/or request to appear at the hearing: https://ustr.gov/… .

USTR proposal and information published in the Federal Register can be found here: https://ustr.gov/… .

Mary Kennedy can be reached at Mary.Kennedy@dtn.com

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