While major container lines and their largest customers have remained largely silent on the Trump administration’s proposed $1 million per U.S. port call fee for Chinese vessels, smaller maritime and container trade stakeholders are voicing strong opposition ahead of the comment period deadline on Monday.
In submissions to the U.S. Trade Representative (USTR) before Monday’s hearing, industry players warned that the proposed fees would impact a broad range of sectors beyond the container trade, including U.S.-based maritime businesses that rely on Chinese-built ships.
The USTR hearing follows a year-long investigation that concluded China has heavily subsidized its shipbuilding industry to dominate global market share. In response, the USTR has proposed several measures, including imposing fees on Chinese carriers calling at U.S. ports, levying charges on non-Chinese carriers with Chinese-built ships, and mandating that U.S.-flag vessels transport more exports. After the hearing, the USTR will determine which penalties to enforce.
Over 200 comments were submitted ahead of the hearing, with most opposing the penalties, citing concerns over increased shipping costs and reduced service availability as Chinese vessels potentially bypass U.S. ports.
Several submissions noted that many U.S.-based ocean carriers operate Chinese-built vessels, particularly in smaller regional markets such as the Caribbean, as well as dry and liquid bulk trades that would also be affected by the proposed fees.
According to Sea-Web, a division of S&P Global, 448 Chinese-built ships are currently operated by U.S. ocean carriers, with dry bulk ships making up about a third of that total. Additionally, U.S.-based fleets include approximately 90 Chinese-built container and general cargo ships. While these vessels are barred under the Jones Act from transporting goods between U.S. ports, carriers like Tropical Shipping and Seaboard Marine use them for international routes connecting U.S. ports to the Caribbean and Central America.
Florida ports and Caribbean shippers have expressed concerns that the proposed fees would severely disrupt trade throughout the region. While larger vessels could distribute the fees across multiple cargoes, smaller ships and shippers would face significant financial burdens if fees are applied uniformly, regardless of vessel size or cargo value.
Carriers serving Caribbean markets with Chinese-built ships “would effectively be out of business, and so would all the islands and countries they trade with,” said West Indian Marine Group in its submission. “Islands and countries in the Caribbean rely on U.S. trade for survival.”
Other specialized carriers also warned that they might be forced out of the U.S. market if the fees are imposed. Atlantic Container Line (ACL), which operates five trans-Atlantic ships, stated that only Chinese shipyards were willing to construct its versatile vessels capable of handling containers, breakbulk, and roll-on/roll-off cargoes.
“ACL would be forced to terminate its U.S. service, close its American offices, lay off its American staff, and redeploy its ships to non-U.S. trades,” the company warned in its submission.
Container lines that continue serving the U.S. market would likely pass on the additional costs to customers, the International Chamber of Shipping (ICS) stated in its submission. The proposed fees could add between $600 and $800 per container moved through U.S. ports, affecting nearly all container vessel calls.
“While some adjustments may be made to mitigate exposure to these fees, avoiding them entirely would be nearly impossible,” ICS noted. “Ultimately, these costs would be transferred to U.S. charterers and consumers.”
The American Association of Port Authorities (AAPA) also raised concerns that large ocean carriers might alter their service routes, increasing calls to Canadian and Mexican ports while reducing U.S. port visits to avoid the fees. This shift, the AAPA warned, could overburden major U.S. ports while significantly reducing business at smaller and medium-sized ports, leading to higher shipping costs.
“This would create major congestion at large ports while causing smaller ports to lose critical business,” the AAPA cautioned. “The likely results would be increased inflation, higher unemployment, and a larger trade deficit.”
As the USTR prepares to finalize its decision, industry stakeholders continue to emphasize the potential ripple effects of the proposed fees, urging policymakers to consider the broader economic consequences before implementing new trade restrictions.
Source: joc.com