By Mike Schuler of gCaptain

Major maritime industry stakeholders are voicing strong opposition to the U.S. Trade Representative’s proposed Section 301 actions targeting Chinese-built and operated vessels, warning of potentially catastrophic effects on U.S. trade and consumer prices.

The USTR’s proposed measures aim to counter China’s growing dominance in maritime sectors by imposing port entrance fees of up to $1.5 million on Chinese-built ships and operators, while promoting U.S. vessel usage. A public hearing is scheduled for March 24, 2025, at the International Trade Commission.

A public comment period is also currently open, giving industry stakeholders a chance to voice their opinion on the proposed measures.

The International Chamber of Shipping (ICS), representing over 80% of the global merchant fleet, warns that the proposed fees could severely disrupt U.S. trade and increase consumer prices. Current data shows China builds 61% of the world’s new merchant vessels, with the proposed fees potentially affecting 98% of container ships calling at U.S. ports.

“The proposed remedies could have an overall net negative impact on the U.S. economy, and result in a decline in U.S. exports,” states ICS in their submission.

Atlantic Container Line (ACL), a specialized carrier, projects dramatic cost increases: export container rates could surge from $500 to $2,500, while import rates could jump from $2,500 to $4,500. ACL warns they would be forced to “terminate its US service, close its American offices, lay off its American staff and redeploy its ships to non-US trades.”

The Chamber of Shipping of America (CSA) emphasizes that U.S. shipbuilding capabilities are currently insufficient, citing decades of industry decline. This limitation is further highlighted by ICS data showing U.S.-built ships cost four times more than foreign-built vessels, with delivery times exceeding 10 years for specialized vessels.

“Due to decades of neglect, the US maritime industry has seen a steady decline…we necessarily must rely on vessels registered in other nations,” CSA states in its submission. CSA further states imposing port fees alone won’t revitalize U.S. shipbuilding or the U.S.-flagged fleet, rather, proactive legislation like the SHIPS for America Act is required.

SeaPort Manatee in Tampa Bay, Florida stresses that the fees would severely harm American businesses, particularly those providing critical short-sea services between the U.S. and neighboring countries. It provided a striking example of potential consequences, noting that one operator, World Direct Shipping, could face fees up to $104 million annually. This could force cargo diversion to trucks, resulting in “1,000 more trucks crossing the border each week, increasing congestion at Texas border crossings and wear/tear on U.S. highways.”

The East Coast Stevedore Company warns that implementing the fees as written would “destroy trade across the entire United States.” This sentiment is echoed across the industry, with particular concerns about impacts on agricultural exports, energy trade, and regional shipping services.

BIMCO, another major industry voice, warns that the fees would severely increase shipping costs, reduce U.S. trade competitiveness, harm American consumers, and disrupt global maritime supply chains without addressing China’s underlying policies. Also, regional short-sea shipping costs could increase by 100-500%, potentially cutting off critical supplies for manufacturing, mining, and construction.

BIMCO argues such measures won’t incentivize a shift away from Chinese shipyards but will instead raise costs and create market distortions. It recommends considering alternative policies to directly enhance U.S. shipbuilding, avoiding unintended consequences that threaten the competitiveness and stability of global maritime trade.

As the March 24 hearing approaches, stakeholders emphasize the need for carefully considered alternatives that can strengthen U.S. maritime competitiveness without causing widespread economic disruption.