The US Trade Representative’s (USTR) office has suggested levying a charge of $1.5 million for Chinese-flagged vessels entering US ports, reported Reuters.
This new proposal is a further step into the investigation into China’s increasing control over maritime and logistics sectors.
According to a USTR’s report on a probe launched earlier this year, China’s global share of shipbuilding tonnage spiked from 5 per cent in 1999 to over 50 per cent in 2023.
This substantial rise was attributed to massive state subsidies and preferential treatment for government enterprises that effectively overpowered private-sector international competitors. The agency also noted that US shipyards had, in parallel, seen a dramatic drop in shipbuilding from 70 ships built in 1975 to a mere five ships today.
The USTR thus implemented several shipping restrictions, with a public hearing scheduled for 24 March on the remedies considered, as reported by Reuters.
The probe, conducted under Section 301 of the Trade Act of 1974, was initiated at the request of the United Steelworkers and four other unions last April. Its goal was to revitalise an industry that has been in steep decline since the 1970s when Japan and South Korea were at the forefront of shipbuilding.
The results include charges of up to $1 million per vessel entering US ports for Chinese maritime transport operators. Alternatively, the US may impose a charge of $1,000 per net ton of a vessel’s cargo capacity, reported Reuters.
A charge of up to $1.5 million per port entry may be imposed on non-Chinese maritime transport operators using Chinese-built vessels, while operators with fleets that are more than 50 per cent Chinese-built would pay $1 million per vessel. The fee decreases in proportion to a fleet’s percentage of Chinese-built ships, with a charge of $750,000 for fleets that are 25 per cent to 50 per cent Chinese-built and $500,000 for those below 25 per cent.
A similar set of fees may also apply to maritime operators with vessels scheduled for delivery from Chinese shipyards within the next two years, according to Reuters.
The USTR stated, however, that the proposal includes a refund of up to $1 million per US port entry for US-built vessels operating in international maritime services.
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The remedies also mandate that no less than 1 per cent of US exports be transported on US-flagged vessels for the first two years, increasing to 3 per cent after two years and 5 per cent after three years.
Additionally, from year three onward, at least 3 per cent of exports must be carried on American-built ships and by year seven, the policy would require a minimum of 15 per cent of US exports to be shipped on US-flagged vessels, with at least 5 per cent transported on American-built ships, reported Reuters.
The USTR proposed restricting access to US shipping data for China’s National Transportation and Logistics Public Information Platform or prohibiting US port terminals from accessing LOGINK software.
