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US tariff plan on Chinese-built ships to hit container sector hardest

Posted on February 26, 2025 |

The US president will decide in about a month on trade actions recommended by the US Trade Representative (USTR) after a year-long review of China’s shipbuilding influence.

The USTR suggests charging up to $1.5 million per port call for Chinese-built ships, $1 million per port call for operators of these vessels, and enforcing US-flag shipping rules.

Public comments remain open until March 24, after which the president will make a final decision.

The container shipping industry will feel the most impact since these ships make multiple port calls, adding around $150 per TEU or $300 per FEU in extra costs.

The proposed fees could raise China-Los Angeles shipping rates from $3,000 to $3,300 per FEU.

A VLCC carrying oil from the US Gulf to China, which now costs $8.3 million or $4.20 per barrel, would see prices rise to $4.95 per barrel with the new fees.

In the last 20 years, China’s shipbuilding market share has grown from less than 10% to nearly two-thirds, while the US holds only 1%.

These trade measures aim to reduce China’s influence in shipbuilding but may increase shipping costs and affect global trade.