"China says fees on ships linked to it will not revitalise US industry"

The United States' plan to impose fees on ships linked to China is facing significant pushback from Beijing, which argues that the move will not only violate World Trade Organization (WTO) rules but also fail to achieve its intended goal of revitalizing the U.S. maritime industry. The proposed fees, which could reach up to $1.5 million per vessel, are part of a broader strategy by the U.S. to curb China's dominance in the global shipping industry and promote domestic shipbuilding. However, experts and officials from China contend that the unilateral approach will have unintended consequences, including increased logistics costs, supply chain disruptions, and potential retaliation from China.



The U.S. Trade Representative (USTR) has proposed significant fees, restrictions, and incentives to restore a maritime industry that China dominated for nearly 30 years. The public comment period opened on February 21, 2025, with comments due by March 24, 2025. The USTR's investigation revealed that China's share of the shipbuilding market grew from less than 5% in 1999 to over 50% in 2023. As of today, China controls 95% of shipping container production and 86% of intermodal chassis. U.S. businesses have suffered a loss of competition and increased economic risks as a result of China’s actions.

In response, the USTR proposes fees on Chinese-operated and Chinese-built vessels visiting U.S. ports, up to $1,500,000, to curb China’s dominance and restore fair competition. This includes service fees for Chinese maritime transport operators, usage of Chinese-built vessels, and maritime transport operators with prospective orders for Chinese-built vessels. In addition to the fees, the USTR proposed the following:

Requirements for U.S. goods to be increasingly transported on U.S.-built vessels.
Restricted access on China’s National Transportation and Logistics Public Information Platform of U.S. shipping data.
Potential negotiations with allied countries to counter China’s policies and reduce reliance on Chinese-dominated maritime sectors.

The U.S. administration is drafting the executive order in a bid to resuscitate domestic shipbuilding and weaken China's grip on the global shipping industry. However, China's commerce ministry has warned that charging fees on Chinese ships entering U.S. ports would disrupt global supply chains and backfire on the U.S. economy and employment. He Yadong, a spokesperson for the ministry, said, "If the U.S. insists on imposing port fees, it will drive up global shipping costs and disrupt the stability of global supply chains."

The proposed fees could inflict significant costs on major container carriers, including Switzerland's msc, Denmark's Maersk, Germany's Hapag-Lloyd, and Taiwan's Evergreen Marine, as well as on operators of ships that carry food, fuel, and autos. The draft executive order also calls on U.S. officials to engage allies and partners to enact similar measures or risk retaliation. The U.S. would also impose tariffs on Chinese cargo-handling equipment, according to the draft order.

The U.S. plan to impose fees on vessels related to China is a unilateralist approach that violates wto rules, according to Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation. It will significantly increase port passage costs in the U.S., and this cost will be passed along the supply chain both upstream and downstream, leaving little room for the development of U.S. enterprises. Zhou Mi stated, "On the one hand, as it will lead to an increase in logistics costs, U.S. enterprises will likely pass on this price to the downstream, thus increasing U.S. supply chain costs. On the other hand, considering the U.S.'s limited shipbuilding capacity, restricting U.S. firms from using Chinese ships will worsen the imbalance in its ship fleet and stunt the growth of its shipbuilding industry."

The U.S. Section 301 investigation is a typical act of unilateralism and protectionism, which seriously violates WTO rules, according to He Yadong. China urges the U.S. to respect the facts and multilateral rules and refrain from going farther down the wrong path, the spokesperson said, noting that China will monitor U.S. actions closely and take necessary measures to safeguard its legitimate rights and interests.

In conclusion, while the U.S. aims to revitalize its maritime industry through the proposed fees on China-linked ships, the move is likely to face significant challenges and unintended consequences. The unilateral approach violates WTO rules and could lead to increased logistics costs, supply chain disruptions, and potential retaliation from China. The long-term effects on the U.S. maritime industry remain uncertain, but the immediate impact on global trade dynamics and diplomatic relations could be substantial.