US trade organisations sign letter urging US Trade Representative to refrain from charging steep port fees on China-related vessels

Almost 300 trade organisations have signed a letter urging the Office of the United States Trade Representative (USTR) to refrain from imposing heavy port fees on China-related shipping.

The proposed action by the USTR comes in response to its Section 301 investigation into China’s targeting of the maritime logistics and shipbuilding sectors. That investigation followed a petition filed in March 2024 by five labour unions in the US. This week’s letter from the trade organisations was submitted to the USTR during the hearing being held this week at the US International Trade Commission in Washington, DC.

As reported in February, following the investigation the UTSR has proposed imposing service fees on Chinese vessel operators of up to $1m per call at US ports, as well as charging shipping companies using Chinese-built vessels up to $1.5m per call. It is also proposing to charge fees for shipping companies that have vessels on order in China. The USTR investigation found that China’s targeting of the sectors is unreasonable and burdens or restricts US commerce, and thus is actionable under Sections 301(b) and 304(a) of the Trade Act.

Billions in cost to business
The letter from the trade organisations, addressed to USTR ambassador Jamieson Greer, said that, while the organisations supported scrutiny of China’s efforts to dominate the maritime industry, the actions proposed by the USTR will not deter China’s broader maritime ambitions and will instead directly hurt American businesses and consumers.

The letter said that more specifically the UTSR’s proposed actions will increase shipping costs for both containerised and non-containerised cargo, by at least 25% (equal to $600-$800 or more), adding approximately $30 billion in annual costs on US businesses and farmers.

“This will lead to higher prices for US consumers and undermine the competitiveness of many US exports – leading to a decline in export revenues and increasing the US trade deficit, contrary to the Trump Administration’s America First trade goals,” the letter stated.

Citing one study published in March this year by Trade Partnership Worldwide on the net economic effects of the proposed taxes on vessel calls, the letter summarised that “overall, total exports and imports would decline, negatively impacting the US economy at a time when the administration is striving to grow the overall economy and create jobs around the country”.

Reduced services
One concern expressed by the signatories of the letter was that the ocean carriers facing the high fees for US port calls would reduce services to many US ports and could potentially divert them to Canada and Mexico, reducing ocean traffic at many smaller ports, which would cause economic damage, including job losses, in communities that relied heavily on port business.

The letter also pointed out that the reduction in vessel calls will increase congestion across the US logistics network causing “a new normal of higher costs and delays” for both imports and exports.

While expressing support for the USTR’s aims of supporting domestic shipbuilding, the letter pointed out nevertheless that its proposed action would force a reduction in US exports because the vessel capacity does not exist and will not exist under the seven-year timeline for building outlined by the USTR.

“To achieve the twin goals of combatting trade deficits and reinvigorating the US shipbuilding industry, we need a dedicated strategy with sustained investments, leadership, and a long-term commitment from both the public and private sectors,” stated the letter. “We encourage the Administration to work with us to achieve its broader goals by considering alternative and more effective measures.”

Economic harm to aftermarket
Trade organisations were given the opportunity to submit their views independently ahead of this week’s hearings. The Auto Care Association, which advocates for the interests of the automotive aftermarket expressed concerns about increased costs, reduced competitiveness and significant disruptions to domestic logistics and supply chain networks.

“The proposed ship fees would cause economic harm by disrupting critical logistics networks, undermine the competitiveness of US businesses and increase prices for American consumers,” said Bill Hanvey, president and CEO of Auto Care Association. “We urge a strategic long-term approach with planned investments in infrastructure and workforce development to strengthen US competitiveness in shipbuilding and maritime logistics.”

The association cited the aforementioned study carried out by Trade Partnership Worldwide, which concludes: “A comprehensive assessment of the various remedies suggested by the USTR finds that in every case they would result in net losses for the US economy, US trade and most of the US shipbuilding supply chain. The proposed remedies, individually and in aggregate, would reduce US gross domestic product (GDP) and likely worsen the overall US trade deficit.”