US now targeting China’s ships as trade war escalates

The United States has introduced new fees for ports that specifically target ships built in China or owned by Chinese companies. This move escalates the ongoing trade conflict with China and is intended to strengthen America’s own shipbuilding industry. The fees, announced by the U.S. Trade Representative (USTR), are meant to counter what the U.S. government sees as China’s unfair control over global shipping.

As reported by CNN and Reuters, the idea behind the fees is to encourage growth in the U.S. shipbuilding sector, which is currently much smaller than China’s far larger production. The plan includes a gradual rollout and several exceptions, which were added after early proposals faced strong pushback from the shipping industry.

Ships owned and operated by Chinese companies will face fees based on the net ton of cargo they carry, and this fee will increase with every net ton of cargo they carry and this fee will increase each year for three years. There will also be fees for ships built in China but owned by non-Chinese companies.

China ship Fees from US to surge with time passed

The USTR decided not to charge fees based on the total number of Chinese-built ships in a company’s fleet or on future orders, an earlier proposal that had received a lot of criticism. The fees will be charged once per trip, with a limit of six charges per year. There are also several exemptions. Ships moving goods between U.S. ports, U.S. ports, U.S. territories, or Caribbean islands will not have to pay.

Empty ships arriving to pick up U.S. exports and U.S. and Canadian ships using Great Lakes ports are also exempt. Foreign car-carrying ships (roll-on/roll-off or ro-ro vessels) can get refunds on the fees if they order new ships built in the U.S. with the same capacity within three years.

The fees are set to begin 180 days after the announcement, leaving global shipping companies with a lot of uncertainty. This timeline, along with already high tariffs on many Chinese goods, is expected to cause more disruptions in global trade and hurt the U.S. economy. Higher shipping costs will likely lead to increased prices for American consumers buying imported goods. Reports already show that large amounts of cargo originally headed for U.S. ports are being sent to European ports instead, which could cause backups in European ports and drive prices up even more.

China has strongly opposed the new fees, saying they will harm both China and the U.S. The Chinese government argues that these measures will not help the U.S. shipbuilding industry recover but will instead raise inflation and destabilize global trade. Global trade organizations have also raised concerns about the potential harm to international commerce, as well as the lack of dedicated funding to revive U.S. shipbuilding. While the Trump administration has said it is open to negotiations, the current trade tensions show no signs of easing soon.

The USTR has laid out long-term plans to give more advantages to ships built in the U.S. Within three years, a second phase will start, focusing on ships that transport liquefied natural gas (LNG). Rules will gradually require that 1% of U.S. LNG exports be carried on ships built, operated, and registered in the U.S. within four years. This percentage will increase to 4% by 2035 and 15% by 2047.