27 May US Varies Chinese Vessel Fee Plan
As previously reported in our newsletters, the USA has announced a raft of port fees on Chinese vessels in an attempt to boost America’s shipbuilding industry.
Given China manufactures over 1000 ships per year whilst the U.S. builds five or fewer, this initiative has been met with mixed feedback. Whilst US shipbuilders are optimistic about this Federal support, the majority of feedback reflects the concern that this scheme will prove detrimental to American businesses and consumers, due to its impact on international trade.
These new fees have the potential to cut exports, increase prices and damage the supply chain, as well as reduce traffic to American ports as it shrinks export markets. In addition, it can result in carriers omitting smaller ports whilst overwhelming larger ones, and increases the probability that goods will be routed through Canada or Mexico instead, creating further delays and costs along the way.
This feedback has seen the Trump administration scale back the penalties, with the Office of the US Trade Representative (USTR) stating it would start charging port fees in 180 days and raise them incrementally over the coming years.
Under the new rules, Chinese-linked ships will be charged fees linked to the weight of their cargo or the number of containers on board, rather than according to how many US ports they call at, with fees assessed up to five times a year; fees which can be waived if the owner places an order for a ship built in the US.
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