Fees on Ships, Other Measures Sought in New Section 301 Petition

U.S. labor groups have submitted a Section 301 petition seeking U.S. government action to counter China’s acts, policies, and practices in the maritime, logistics, and shipbuilding sector. The Office of the U.S. Trade Representative has 45 days to determine whether to initiate an investigation.

The petition asserts that the U.S. commercial shipbuilding industry “is a shell of its former self,” currently ranking 19^th in the world in terms of global commercial vessel production, and that “the biggest obstacle to the industry’s recovery is the unfair trade practices of the world’s largest shipbuilding nation: China.” The petition asserts that China “has seized market share, suppressed prices, and created a worldwide network of ports and logistics infrastructure that threaten to discriminate against U.S. ships and shipping companies, disrupt supply chains, and undermine vital national security interests.”

While Section 301 gives USTR the power to respond to unfair trade practices by imposing tariffs, the petition does not request them and instead calls on USTR to take the following measures.

– impose fees on vessels built in China that dock at U.S. ports, with higher fees for larger, heavier, and newer ships and fee increases at regular intervals (the petition mentions a “hypothetical” fee of $1 million for a 20,000 TEU ship, which it said would not meaningfully increase costs for U.S. consumers)

– use proceeds from those fees to establish a domestic shipbuilding industry revitalization fund, with priority for cargo, container, and tanker ships

– take actions to support stronger demand for U.S.-built vessels, such as directing U.S. Customs and Border Protection to rescind rulings creating exemptions to the Jones Act, ensuring that cargo preferences are fully enforced and strengthened, and requiring gas and oil exports as part of foreign aid or trade agreements to occur on U.S.-built tankers

– address China’s drive to dominate port and logistics infrastructure platforms and equipment

– negotiate with Japan, Korea, and other major shipbuilding countries to address concerns about their own government support programs and coordinate measures to address China’s unfair practices