The Trump administration has announced the charges on Chinese-made and Chinese-owned vessels docked at US ports, indicating a further escalation of a trade war between all two greatest economies around the world.
The decision, revealed by the US Trade Representative (USTR), follows a year-long investigation first launched under the Biden administration.
“Shipping and transport are crucial to the free flow of American economic security and commerce,” said Ambassador Greer. “The actions of the Trump administration will reverse China’s control, address threats to the US supply chain and send demand signals for US-built ships,” USTR said in a statement.
Under the new policy, owned ships built in China face charges calculated based on net tonnage per voyage to the US. The first phase of the policy takes effect in 180 days. The second phase, which targets foreign-built liquefied natural gas (LNG) vessels, is scheduled to take place over three years.
Background of Chinese Shipbuilding Practices
In April 2024, USTR began an investigation into China’s shipbuilding practices under Section 301 of the Trade Act 1974. The study proposed a service fee of up to $1 million per Chinese-made vessel and $1.5 million for foreign-owned marine airlines with fleets containing Chinese-made vessels.
Amid China’s rapidly expanding automotive and shipping sector, the country is significantly expanding its global maritime footprint. According to data from Beson Voyage, Chinese-made vessels accounted for 81% of the global shipbuilding market share in 2024. In the energy sector, China holds approximately 48% of the liquefied petroleum gas (LPG) shipping market and 38% of the LNG market.
The USTR said five national trade unions petitioned on March 12, 2024 for an investigation. City has raised concerns over China’s growing control in maritime logistics and shipbuilding. The USTR concluded that this advantage is “irrational as it expels foreign companies, robs market-oriented businesses and commercial opportunities, reduces competition and reduces competition. It creates dependence on China, increases risk and reduces supply chain resilience.”
In response to last year’s initial proposal, the Chinese Commerce Department called the US investigation “a mistake, as well as a mistake.” Following the latest USTR announcement, no further responses have been issued yet.
Trump suggests that tariffs will not increase further in China
In a contradictory comment, Trump said he did not want to raise tariffs on Chinese goods further, citing concerns that trade between the two countries could stall.
“At some point, I don’t want them to be expensive. At certain points, you make it in a place where people don’t buy, so I might not want to be expensive and I might not want to go that level,” he told White House reporters.
The Trump administration imposes a 145% tariff on all Chinese imports. In retaliation, China is implementing a 125% tariff on US goods. China said last week it would “ignor” Trump’s tariffs and call them a “meaningless number game.” Instead, China has shown that it could potentially move retaliatory measures, such as legal consultants, tourism and education, into the US services sector.
