Trump administration drafts order to impose port fees on Chinese-built vessels

The United States is planning to impose fees on any ship docking at US ports that is part of a fleet containing Chinese-built or Chinese-flagged vessels, with plans to push its allies to adopt similar measures or face retaliation, according to a draft executive order.

According to the exclusive material by Reuters, the US administration, under President Donald Trump, is crafting the executive order to revive domestic shipbuilding and curb China's growing influence over global shipping, Caliber.Az reports.

Addressing China's expanding dominance on the seas and the declining readiness of US naval forces has become a rare area of agreement between US Republican and Democratic lawmakers.

Chinese shipbuilders now account for over 50% of global merchant vessel cargo capacity, a significant rise from just 5% in 1999, according to the Center for Strategic and International Studies. This shift has come at the expense of shipbuilders in Japan and South Korea, while US shipbuilding peaked in the 1970s and now represents only a small portion of industry output.

The draft executive order, dated February 27 and reviewed by Reuters, proposes that fees be imposed on any vessel entering US ports, regardless of where it was built or flagged, if that vessel is part of a fleet that includes ships built or flagged in the People's Republic of China (PRC).

The order draws inspiration from a proposal by the US Trade Representative’s office last month, which suggested imposing fees up to $1.5 million on Chinese-built vessels entering US ports, following a probe into China's increasing control over global shipbuilding, maritime, and logistics sectors. A key difference is that the draft order does not include the language from the USTR proposal stipulating that the fees would apply if Chinese-built ships account for 25% or more of vessels in a fleet, nor does it assign a dollar value to the fees or outline how they will be calculated.

The plan could lead to significant costs for major container carriers such as China’s COSCO, Switzerland's MSC, Denmark's Maersk, and Taiwan’s Evergreen Marine, as well as for operators of ships transporting bulk food, fuel, and automobiles. MSC’s CEO, Soren Toft, mentioned earlier this week that the world's largest container carrier might reduce its visits to US ports to limit exposure to the new fees.

The draft executive order also calls for US officials to engage with allies and partners to implement similar measures, warning of retaliation for non-compliance. Additionally, the order includes provisions to impose tariffs on Chinese cargo-handling equipment.

"The national security and economic prosperity of the United States is further endangered by the People's Republic of China's unfair trade practices in the maritime, logistics, and shipbuilding sectors," the draft order states.

In response, French carrier CMA CGM announced on March 6 that it would expand its US-flagged fleet, American President Lines, from 10 to 30 ships over the next four years. CMA CGM, the world’s third-largest container shipping line and part of a vessel-sharing alliance with companies including COSCO, counts global retailer Walmart as a top customer. The proposed US port fees on China-built ships would affect all shipping companies, CMA CGM said.

By Tamilla Hasanova