As we discussed earlier in February, the United States has had an ongoing process to investigate and address unfair trade actions related to China’s maritime, logistics, and shipbuilding sectors. At that time we pointed out that logistics professionals could face an entirely new category of concerns in scheduling international shipping. Now a formal proposal has been set forth.
On February 21, 2025 the United States Trade Representative’s office proposed a series of actions, including imposing fees on Chinese-built ships docking at U.S. ports and implementing measures to strengthen the domestic shipbuilding industry. These actions are in response to the conclusions reached in the USTR’s section 301 investigation into China’s maritime, logistics, and shipbuilding sectors, concluding that China’s practices are unreasonable and restrict U.S. commerce. The investigation was initiated under the Biden Administration, but the remedies have been proposed under the Trump Administration.
It is not surprising that the maritime, logistics, and shipbuilding investigation would have bipartisan support. A group of five Democratic Senators including Sen. Tammy Baldwin (WI), Sen. John Fetterman (PA), Sen. Elizabeth Warren (MA), Sen. Elissa Slotkin (MI), and Sen. Amy Klobuchar (MN) (all states with traditional shipbuilding and logistics industries), had urged President Trump to act swiftly based on the USTR’s findings. In their letter, the senators emphasized the economic and national security risks posed by China’s dominance in shipbuilding, citing the significant disparity in production capacity between the two nations. The senators called for immediate relief measures, highlighting China’s use of government subsidies and favorable loans that distort the global shipbuilding market. They also referenced the petition filed last year by the United Steelworkers and other labor unions, which recommended implementing port fees on Chinese-built ships and establishing a Shipbuilding Revitalization Fund to support domestic industry growth.
Meanwhile, shipbuilding uses a lot of steel and employs people both to produce steel and to build ships. Both increasing demand for steel and employment in manufacturing reflect stated Trump Administration goals. Thus, members of both parties see potential benefit in acting against the Chinese practices identified in the 301 investigation.
USTR opened a public comment period regarding its proposed actions. The agency is inviting stakeholders to provide input on the proposed fees and restrictions targeting Chinese ship operators and Chinese-built vessels. The proposed measures include imposing service fees on Chinese Maritime Transport Operators at a rate of up to $1,000,000 per entrance of any vessel to a U.S. port or up to $1,000 per net ton of the vessel’s capacity. Other fees include fees on prospective order from Chinese vessels and fees for operators with fleets comprised of Chines-built vessels. Additionally, the USTR is proposing to set restrictions on which vessels may export U.S. products per calendar year. The proposed restrictions for the first year include a requirement that1% of all exports of U.S. must be exported by U.S.-flagged vessels by U.S. operators. Thereafter the restrictions will increase to 3% in year 2, 5% in year 3 and 15% in year 7.
Interested parties can review the Federal Register notice and submit comments through the designated online portal.
March 10, 2025: Deadline to request participation in the public hearing.
March 24, 2025: Public hearing at the International Trade Commission.
March 24, 2025: Deadline for submitting written comments.
As the administration considers its next steps, industry stakeholders and policymakers will closely watch how these proposed measures unfold and their impact on the U.S. maritime and logistics sectors. If you have questions regarding the impact of these measures on your supply chain, please contact any attorney at Barnes Richardson and Colburn.
Source: Barnes, Richardson and Colburn, LLP