The U.S. Trade Representative (USTR) has announced its final actions regarding the Section 301 investigation into China’s shipbuilding industry, introducing significant changes from the initial proposals.

Key Changes and Fee Structure:

  • Revised Fees: Instead of a flat fee, new fees will be based on vessel net tonnage (NT) or container count and will apply per U.S. voyage (capped at five times per year per ship). Fees are not “stacked,” meaning only one type of fee applies per voyage.
  • Phased Implementation: The actions will roll out in two phases, with fees initially set at zero for the first 180 days to allow businesses to adjust.
  • Exemptions: The fees effectively do not apply to Great Lakes or Caribbean shipping, shipping to/from U.S. territories, or bulk commodity exports on ships arriving in the U.S. empty.
  • Incentives for U.S.-Built Ships: Ordering a U.S.-built vessel can lead to a suspension of fees or restrictions on an equivalent non-U.S.-built vessel for up to three years.

Phase 1 Actions (Effective after 180 days):

  • Fees on Chinese Vessel Owners/Operators: Starting at $50/NT, increasing by $30/NT annually for three years.
  • Fees on Operators of Chinese-Built Ships: Starting at $18/NT or $120 per container, increasing by $5/NT (or proportionally per container) annually for three years.
  • Fees on Foreign-Built Car Carriers: A fee of $150 per Car Equivalent Unit (CEU) capacity will be applied to incentivize the use of U.S.-built car carriers.

Phase 2 Actions (Beginning in 3 years):

  • LNG Transport Restrictions: Incremental restrictions on transporting Liquefied Natural Gas (LNG) via foreign vessels will be introduced over 22 years to encourage the use of U.S.-built LNG carriers.

New Investigations:

  • USTR has also launched new Section 301 investigations into:
    • Ship-to-shore cranes (potential 100% tariff).
    • Cargo handling equipment, including containers and chassis (potential 20%-100% tariffs).
  • A hearing on these new investigations is scheduled for May 19.

These measures aim to address concerns regarding China’s practices in the maritime sector and promote the U.S. shipbuilding industry.

Source: NCBFAA