Sign in Subscribe
International trade

US Imposes Fees on Chinese Ships to Counter Commercial Shipbuilding Dominance

Strategic Insights

— 2 min read

The US government has begun imposing fees on Chinese ships docking at American ports, a move aimed at countering China's dominance of commercial shipbuilding. The fees, which will take effect on the same day as new tariffs on Chinese goods, are part of a broader trade war between the two countries. The US has accused China of using subsidies to gain an advantage in shipbuilding, and the fees are seen as a way to deter ocean carriers from buying Chinese ships. Industry experts warn that the fees will increase costs for shipping companies and eventually push up the cost of imported goods.

Key Takeaways:

  • The US has imposed fees on Chinese ships docking at American ports, with the goal of countering China's dominance of commercial shipbuilding.
  • The fees will take effect on the same day as new tariffs on Chinese goods, and must be paid by ships owned by Chinese shipping companies.
  • Non-Chinese shipping lines will also have to pay fees when they send Chinese-built ships to American ports.
  • The fees are intended to help revitalize the US shipbuilding industry, which has withered over the decades.
  • China's Ministry of Transport has responded by announcing plans to hit American vessels with fees when they dock at Chinese ports.
  • The US Trade Representative has removed a provision that would have suspended licenses to export liquefied natural gas if a certain amount of the gas was not carried on American-made ships.
  • HSBC estimates that COSCO, China's dominant shipping company, could pay $1.5 billion in fees next year.
  • American ships can cost up to five times the amount of those built in Asia, making them less competitive in the global market.
  • The US has passed bipartisan legislation in Congress that provides subsidies to the shipbuilding industry, though it is unclear when or if the bill will progress.
  • Hanwha, a South Korean conglomerate with big shipbuilding operations, has invested in an American shipyard in Philadelphia and ordered 10 oil and chemical tankers from the plant.
  • The US penalties on Chinese ships are unlikely to prompt a rush of orders for American ships, but could work alongside other efforts to revitalize the American shipbuilding industry.

Statistics:

  • China made 60% of the world's large vessels in 2024, up from 44% five years earlier (BRS Shipbrokers).
  • The US made just 1 large commercial vessel in 2024 (BRS Shipbrokers).
  • Chinese-built ships can cost up to five times less than American-built ships.
  • The fees could add hundreds of dollars to the cost of a vehicle carried on a foreign ship (shipping analysts).
  • HSBC estimates that COSCO could pay $1.5 billion in fees next year, which could reduce COSCO's operating earnings by nearly three-quarters in 2026.

Sources:

  • "US Imposes Fees on Chinese Ships" by The New York Times
  • BRS Shipbrokers
  • HSBC
  • The Coalition for a Prosperous America
  • The Cato Institute
  • The Center for Strategic and International Studies
  • The United States Trade Representative
  • The US Department of Commerce
  • The Philadelphia Inquirer

Read more