Starting October 14, a new front opens in U.S.–China trade warfare.
Under Section 301 of the Trade Act of 1974, the U.S. government will make port fees more expensive for ships tied to China. The administration is rolling out new fees on Chinese-built, owned and operated vessels, a move aimed at pushing back against Beijing’s dominance and “unfair foreign practices” in global shipbuilding. China currently controls more than half of all new ship orders worldwide, while America’s commercial shipbuilding industry has nearly disappeared. By targeting Chinese vessels with hefty charges, U.S. trade officials hope to level the playing field.
If successful, this policy could send ripple effects across global shipping routes, supply chains and ultimately, consumers. But questions remain about the efficacy of this strategy given that experts suggest the freight industry can mute much of the intended impact.
The U.S. Navy said U.S. commercial shipbuilding has experienced a “near-total collapse,” according to Reuters. CSIS reports China’s shipyards represented 53 percent of global ship orders by tonnage year to date, while the U.S. captured just 0.1% of the market. In an analysis of the sector, the policy research organization found that the state-owned China State Shipbuilding Corporation (CSSC) built more commercial vessels by tonnage in 2024 than the entire U.S. shipbuilding industry has built since the end of World War II.
The new United States Trade Representative fees vary based on how closely tied the ships are to China. For Chinese-built and owned vessels, the fee will be $50 per net ton, or $120 per container discharged, whichever is higher. That per ton rate will increase by $30 a year for three years, and the container fee will rise to $250 during that timeframe.
For ships built in China but owned by non-Chinese companies, the rate is $18 per net ton, with $5 annual increases for three years.
In addition to the fees, the USTR has outlined certain exemptions based on factors like ship size as well as incentives for companies building ships in the U.S.
Overall, the fee structure is less hefty than had initially been proposed but analysts say they will still add up. An average-sized container ship can expect to pay more than $680,000 a visit, the Financial Times calculated based on UN figures of US port calls in 2023. Analysts say the fees could exceed $1 million for ships carrying more than 10,000 containers.
John D. McCown, founder of The McCown Report, said to expect a “ripple effect” across the industry, as trade lanes involving the U.S. account for more than a quarter of container miles. “Tariffs and the proposed USTR ship fee plan are moving container volume related to trade lanes involving the U.S. into unchartered waters,” he said.
Gene Seroka, executive director of the Port of Los Angeles, reported 30 percent of the annual vessel calls to the busiest port in the U.S. are by China-built or operated ships. During a press briefing on September 17, Seroka estimated fees could land anywhere from $125 to $300 per container. “Here at the Port of LA now that cost per box may be lower than other entry points, simply because of the average volume we have on every ship that comes in. Smaller ships will have a higher cost for a box,” he said.
“On top of tariffs, on top of complexity, uncertainty, now we’ve got yet another cost associated with bringing goods into the country,” Seroka said.
How freight operators end up handing these additional costs remains to be seen. So far, the biggest in the industry have said they’ll hold off on passing these costs onto shippers. The Wall Street Journal reported that MSC, the largest player in the sector, told customers there would be no surcharge implemented “at this time.” The company did clarify that that position could change as the situation evolves. Last week, Maersk, the world’s second largest ocean carrier, issued a statement that it would also not levy a surcharge related to the 301 fees.
If these companies eventually adjust routes and frequencies to mitigate fee impacts, however McCown said that alone would be enough to increase costs. “The USTR ship fee plan could result in a withdrawal of overall capacity that will put upward pressure on the shipping rates charged by carriers for loads into and out of the U.S,” he said.
Maersk has said it had no plans to adjust service to U.S. ports at this time.
Winners & Losers
Ultimately, the overall impact of the USTR port fees could be minimal.
Container shipping market intelligence firm Linerlytica said only 20% of the current fleet of containerships calling at U.S. ports are affected, and they are expected to be swapped out for exempt vessels. “Chinese carriers such as COSCO may be able to circumvent the onerous port fees if they withdraw their ships and replace them with slots on fee-exempt ships operated by alliance partners. Based on Linerlytica’s analysis, all of the main carriers have sufficient exempt ships available to make the switch without severe operational disruptions,” the firm reported.
Goldman Sachs found that the fees only apply to 4 percent of international ships serving the U.S. ports are China-built or operated and fall within the stated exemptions. Further, the U.S. represents 12 percent of global shipping trade, supporting the conclusion that it’s possible for operators to redeploy fleets, as necessary.
Already, some shippers are making adjustments to steer clear of the added costs. Seaspan, a leading independent ship owner and operator, has shifted its headquarters from Hong Kong to Singapore, reflagging more than 40 of its 100 ships, according to TradeWinds News. Meanwhile, MSC has reportedly been swapping out Chinese-built ships on U.S. routes.
South Korea and Japan, the second and third largest shipbuilding countries, are watching the situation closely. South Korea could already be reaping the benefits. The parent company of HD Hyundai’s shipbuilder received 50 containership orders, representing more than 60 percent of its 2025 in the first half of the year. For Japan, picking up market share would mean overcoming several hurdles, chief among them is constrained capacity.
Hitoshi Nagasawa, president of the Japanese Shipowners’ Association, told the Financial Times, the industry has no choice but to diversify. “Relying solely on China for shipbuilding is risky,” Nagasawa said. “A shift is bound to happen where those ordering 100 percent of ships from China until now might do 60 to 70 percent with China and 40 percent with Japan or South Korea.”
The long-term impact is still unknown but timing could prove a factor. The USTR fees kick in just ahead of potential reciprocal tariffs on goods from China, which have been paused until November. How ever the freight industry changes as a result, all eyes are on the U.S. economic impact.
“Let’s see when these ships come in how many containers are loaded with the assessment is and how it works its way all the way down,” Seroka said. “Then we’re going to follow the money, and see exactly how these costs are going through the system, and what impact it could have on American consumers.”
