U.S. authorities propose charging Chinese ships up to $1.5M to enter ports
The U.S. Trade Representative's Office (USTR) has proposed charges of up to $1.5 million to Chinese ships docking in U.S. ports and $500,000 for ship operators with only one vessel in their fleet built in China or ordered from a Chinese shipyard.
This initiative seeks to promote U.S. shipping and penalize Chinese domination in global shipping.
Reuters reports that the USTR said in a January 16 report on a probe, launched during the administration of former President Joe Biden that China increased its share of global shipbuilding tonnage from 5% in 1999 to over 50% in 2023 because of massive state subsidies and preferential treatment for state-owned enterprises that are squeezing out private-sector international competitors.
The Federal Registrar has scheduled a public hearing on proposed fees and restrictions for March 24.
The USTR has indicated that in 1975, U.S. shipyards were building 70 ships, but just five annually today.
Details of proposed fees
The 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 (COSCO).
According to the notice, non-Chinese maritime transport operators operating Chinese-built ships would pay up to $1.5 million per port entry. Those with a fleet greater than 50% Chinese-built would pay $1 million per vessel entry regardless of origin. The fee would fall to $750,000 if the Chinese fleet percentage was between 25% and 50% and $500,000 if under 25%.
A second set of fees in similar amounts could apply to maritime operators with vessels on order from Chinese shipyards to be delivered over the next two years.
Additionally, the probe indicates that initially, 1% of U.S. export products must be transported on U.S.-flagged vessels by U.S. operators. This percentage increases to 3% in year two and 5% in year three.
By year seven, 15% of U.S. exports must be transported on U.S.-flagged and U.S.-operated vessels, of which 5% must also be U.S.-built vessels.
According to Linerlytica analysts, about 17% of the container ships arriving at U.S. ports are currently made by China.
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