The Trump administration is proposing new fees on Chinese-built commercial ships operating in U.S. trade lanes, aiming to counter China’s growing dominance in global shipping and shipbuilding.
Read also: Global Shipping Market Faces Turbulence as Tanker Rates Surge on China Routes
Unveiled by the Office of the U.S. Trade Representative (USTR), the plan includes service fees on Chinese vessels entering U.S. ports and mandates requiring a portion of U.S. exports to be transported on American-owned and operated ships. The proposal follows a long-running trade investigation that began under the Biden administration, which found China’s aggressive maritime policies had severely undercut competition.
Challenging China’s Market Grip
China has dramatically expanded its influence in the shipping industry, increasing its market share from under 5% in 1999 to over 50% in 2023. The country owns nearly a fifth of the world’s commercial fleet and controls 95% of global shipping container production, according to USTR findings.
While the U.S. remains a leader in warship production, its commercial shipbuilding industry lags far behind, ranking 19th globally and producing fewer than five ships annually. By contrast, China builds over 1,700 ships per year. South Korea and Japan, the only other major players in commercial shipbuilding, could benefit from U.S. efforts to curb reliance on Chinese-built vessels.
New Fees and Shipping Mandates
Under the proposal, fees as high as $1 million would be levied on Chinese-built ships entering U.S. ports. Additionally, a phased-in requirement would gradually increase the percentage of U.S. goods that must be transported on U.S.-flagged and U.S.-built vessels, starting at 1% and rising to 15% over seven years.
This effort builds on the Jones Act, which mandates that goods moving between U.S. ports be carried on American-built and -crewed vessels. The administration argues that expanding such policies to international trade routes is necessary to protect economic security and reduce reliance on China.
Economic and Trade Implications
While the move is backed by unions and national security advocates, retailers and importers warn that higher shipping costs could ultimately raise prices for American consumers. The proposal also arrives as Trump escalates trade tensions, recently announcing tariffs on Chinese goods and threatening duties on industries such as automobiles, semiconductors, and pharmaceuticals.
The proposed maritime restrictions are now open for public comment, with a hearing scheduled next month. As the administration moves forward, the shipping industry—and global trade partners—will be watching closely.
