A cargo ship full of shipping containers is seen at the port of Oakland as trade tensions escalate over US tariffs, in Oakland, California, US, on March 6, 2025. Photo: IC

A public hearing on Washington proposed levies on Chinese ships docking in the US is scheduled to be held on Monday and Wednesday by Office of the United States Trade Representative (USTR). However, discontent toward the potential levies is simmering as American industry associations complained such practice would hurt their interest and global competitiveness. In addition, Caribbean Community leaders are concerned that the US' proposed fines on Chinese-made cargo vessels would hurt the region's oil and gas industry as well as push up transportation costs. 

Chinese experts said that this proposal, if implemented, would not only burden US industrial workers and exporters by driving up product prices and increasing costs, but also disrupt the global supply chain. Furthermore, a unilateral policy imposing additional fees on Chinese ships docking at US ports is of no help to revive the American shipbuilding industry, as the US has no advantage on price, technology or efficiency even if compared to Japan, South Korea and Southeast Asia. 

The entire supply chain will be represented at the hearing, from soybean growers to shippers to Chinese shipbuilders. Dozens of business owners and trade groups will explain why they fear the proposals would disrupt global trade more than US President Donald Trump's approach to tariffs, Bloomberg reported on Monday.

"They see this as more of a threat than the tariffs, because of the impact it's going to have on the supply chain," said Jonathan Gold, vice president of supply chains and customs policy at the National Retail Federation. "Carriers have said they're not only going to pass along the cost, but they're going to pull out of certain rotations, so the smaller ports, Oakland, maybe Charleston, Delaware, Philly. They're all going to suffer as a result," per Bloomberg.

As part of his plan to revive US shipbuilding, US President Donald Trump is drafting an executive order that would rely on funding from a USTR's proposal to levy fines of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China to American ports, per Reuters.

The previous US administration launched Section 301 investigation in April 2024 on several Chinese sectors, including shipbuilding. USTR announced in February to seek public comment on proposed actions in Section 301 Investigation of China's maritime, logistics, and shipbuilding sectors.


Unpopular move

In letters to the USTR and interviews with Bloomberg News, business owners and industry officials said the proposals don't make sense if the goal is to revive the US domestic shipbuilding industry, and would potentially be devastating for the US economy. They argue it would make American goods too expensive internationally, divert trade away from US regional hubs to Canada and Mexico, overwhelm major US ports, and force up global freight rates and inflation at home, according to Bloomberg.

Any policy that adversely affects maritime transportation will inevitably reverberate throughout the trade sector, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday. 

Zhou said it is difficult to say whether the additional fee on Chinese-made ships can rejuvenate the US shipbuilding industry, but it is certain that such fees will increase operating costs for logistics and the supply chain. This, in turn, may lead to higher prices for imported goods in the US and diminish the international competitiveness of its exported products.

The levies could theoretically generate between $40 billion and $52 billion for US coffers, Bloomberg quoted Clarksons Research Services Ltd, a unit of the world's largest shipbroker as saying. But, already roiled by uncertainty over the escalating tariffs on Chinese goods, steel and aluminum, and with a fresh round of reciprocal measures expected on April 2, some American companies and others in the industry are anxious.

"What the USTR has proposed - a backward-looking, retrospective, multi-million dollar per port call fee - won't work," said Joe Kramek, chief executive officer of the World Shipping Council, who is set to testify on Monday. "It will only serve to penalize US consumers, businesses, and especially farmers, raising prices and threatening jobs," Bloomberg reported.

He Yadong, spokesperson from China's Commerce Ministry, noted on February 27 that charging fees on Chinese ships entering US ports would disrupt global supply chains and backfire on the US economy and employment. If the US insists on imposing port fees, He said, it will drive up global shipping costs and disrupt the stability of global supply chains. 

Such measures would also increase domestic inflationary pressures in the US, weaken the global competitiveness of US goods, and harm US consumers and businesses, the spokesperson warned, according to Xinhua.

The negative impact of US proposed additional fees on Chinese ships will not be confined within the US, but create shockwaves internationally. 

Caribbean Community (CARICOM) leaders plan to tell US Secretary of State Marco Rubio this week that the US' proposed fines on Chinese-made cargo vessels would hurt the region's oil and gas industry as well as push up transportation costs, Bloomberg quoted Guyana's President Irfaan Ali as saying on Saturday.

Ali said CARICOM leaders discussed the issue in a virtual meeting on Friday held to plan for Wednesday's meeting with Rubio in Jamaica.

Ali said the US' proposed tax on Chinese-made crude and gas vessels as well as other cargo ships would adversely affect the oil and gas industries of Guyana, Trinidad and Tobago, and Suriname. 

"That, of course, will have an effect on the cost of goods coming into the region, also transport coming into the region," Ali told reporters. Fines on Chinese-made and Chinese-linked vessels would also increase the cost of imports to the Caribbean, per Bloomberg.

The levies, once implemented, are certain to reshape the global supply chain landscape. Many firms may seek ships built by other countries, yet the supply will be insufficient as shipbuilding cycle is very long. Alternatively, they may opt to bypass American ports, which will further weaken the scale and risk resistance capacity of the country's supply chain, said Zhou.

Xu Kai, chief information officer from Shanghai International Shipping Institute, told the Global Times as Chinese-built ships hold an absolute advantage in shipping capacity, if Chinese vessels are not chosen, most alternatives would be older vessels with smaller capacity and poorer cost-effectiveness, leading to a significant increase in transportation costs. 

The International Chamber of Shipping (ICS), representing over 80 percent of the global merchant fleet, warned that the proposed fees could severely disrupt US trade and raise consumer prices. Current data shows China builds 61 percent of the world's new merchant vessels, with the proposed fees potentially affecting 98 percent of container ships calling at US ports, gCaptain, a maritime and offshore industry news website reported on Wednesday. 

In contrast, the US share has fallen to just 0.1 percent in the world's commercial shipbuilding market in two decades, the Associated Press quoted a report released this month by the Center for Strategic and International Studies.

The manufacturing industry in the US, especially the traditional manufacturing sector, has been on a downward trend for a long time, said Zhou, noting that a single policy on imposing massive fees on China-linked ships is unlikely to boost the US shipbuilding industry as the US has no advantage on price, technology or efficiency even if compared to Japan, South Korea and Southeast Asia.