The Office of the U.S. Trade Representative is proposing to impose fees and/or service restrictions on cargo ships operated by or built in China following USTR’s announcement in January that China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance is unreasonable and burdens or restricts U.S. commerce and is therefore actionable under the Section 301 trade law.
Potential actions may include one or more of the following and could increase the cost of goods imported by sea. A public hearing on these options will be held March 24 and requests to appear are due by March 10. Public comments are also due by March 24.
Fees
- charging Chinese vessel operators a flat fee of $1 million, or a fee of $1,000 per net ton of vessel capacity, per vessel entrance to a U.S. port
- charging operators of Chinese-built vessels a flat fee of up to $1.5 million, or $500,000 to $1 million based on the percentage of Chinese-built vessels in the operator’s fleet, per entrance of Chinese-built vessels to a U.S. port
- charging maritime transport operators an additional fee of $500,000 to $1 million per vessel entrance to a U.S. port based on the percentage of vessels ordered from Chinese shipyards
- allowing refunds of up to $1 million per vessel entrance to a U.S. port for entries of U.S.-built vessels through which the operator is providing international maritime transport services
Service Restrictions
- requiring a certain percentage of U.S. goods (e.g., capital goods, consumer goods, agricultural products, and chemical, petroleum, or gas products) exported by vessel to be exported on U.S.-flagged vessels by U.S. operators each year: one percent immediately, three percent within two years, five percent within three years (including three percent on U.S.-flagged, U.S.-built vessels), and 15 percent within seven years (including five percent on U.S.-flagged, U.S.-built vessels)
- requiring U.S. goods to be exported on U.S.-flagged, U.S.-built vessels but allowing export on non-U.S.-built vessels provided the operator demonstrates that at least 20 percent of U.S. products will be transported annually on U.S.- flagged, U.S.-built ships
Other
- reducing exposure to and risks from China’s promotion of the National Transportation and Logistics Public Information Platform (LOGINK) or other similar platforms, such as recommending that relevant U.S. agencies investigate alleged anticompetitive practices from Chinese shipping companies, restricting LOGINK access to U.S. shipping data, or banning or continuing to ban U.S. ports and terminals from using LOGINK software
- entering into negotiations with allies and partners to counteract China’s acts, policies, and practices and reduce dependencies on China in the maritime, logistics, and shipbuilding sectors
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