Notice of Action and Proposed Action in Section 301 Investigation of China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance, Request for Comments
The Trump Administration issued an order that could dramatically change global distribution patterns, or create some interesting distribution challenges as companies work to avoid fees. Read notice here:
https://ustr.gov/sites/default/files/files/Press/Releases/2025/301%20Ships%20-%20Action%20FRN%204-17.pdf
The new order spells out the following (from Armada Corporate Intelligence):
1. Fees for Chinese-Owned and Operated Ships
• Grace Period: $0 for the first 180 days (until October 14, 2025).
• Phase 1 (October 14, 2025 – April 17, 2026):
• Fee: $50 per net ton per U.S. voyage (applied up to 5 times annually per vessel).
• Per Container Equivalent: ~$120 per container unloaded.
• Annual Increases:
• 2026–2027: $80 per net ton ($190 per container).
• 2027–2028: $110 per net ton ($220 per container).
• By April 17, 2028: $140 per net ton ($250 per container).
2. Fees for Chinese-Built Ships (Owned by Non-Chinese Entities)
• Grace Period: $0 for the first 180 days (until October 14, 2025).
• Phase 1 (October 14, 2025 – April 17, 2026):
• Fee: $18 per net ton per voyage (applied up to 5 times annually per vessel).
• Per Container Equivalent: ~$45 per container unloaded
• Annual Increases:
• 2026–2027: $23 per net ton ($170 per container).
• 2027–2028: $28 per net ton ($220 per container).
• By April 17, 2028: $33 per net ton ($250 per container).
3. Car Carrier Fees (Foreign-Built, Non-U.S.)
• Grace Period: $0 until October 14, 2025.
• Post-Grace Period: $150 per car equivalent (CEU) unit.
4. Exemptions
• Empty vessels arriving to load U.S. exports (e.g., coal, grain).
• Ships with capacity ≤4,000 TEU (containers) or ≤55,000 deadweight tons (bulk carriers).
• Vessels operating in the Great Lakes or traveling <2,000 nautical miles to U.S. ports.
• U.S.-flagged carriers in short-sea shipping (e.g., Hawaii routes).
5. LNG Carrier Restrictions (Phase 2)
• Begins in 2028: Gradual restrictions on foreign-built LNG carriers transporting U.S. LNG.
• Full restrictions by 2047: Only U.S.-built LNG carriers allowed for U.S. exports.
6. Waivers for U.S.-Built Ship Orders
• Operators can avoid fees if they order U.S.-built ships of equivalent capacity within 3 years.
Impact on Per-Container Costs
• By 2028, fees could add $250 per container for Chinese-owned ships and $250 per container for Chinese-built ships.
• For context, a typical 10,000-TEU container ship could face $2.5 million in fees per voyage under the 2028 rates.
Industry Implications: Just based on early assessments, there are some early impacts that are worth considering. For most product types, the extra container fee will be spread out and will likely not be felt. It will be more of a fee-based revenue generator for the US general fund. But for some product categories, it could be difficult for them to absorb some of the fees once the order is fully mature (2028).
Some early thinking on what could happen:
• Obviously, higher shipping costs: Likely passed to U.S. importers/consumers, exacerbating inflation.
• Port congestion: Smaller ports may lose traffic as carriers consolidate at major hubs (e.g., Los Angeles, New York).
• Trade diversion: Chinese goods may reroute through Europe or other regions to avoid fees.
