The U.S. Trade Representative’s Office (USTR) announced on Thursday (April 17) that it will impose high fees on commercial ships built and operated by China, and gradually restrict the use of non-U.S.-made automotive transport ships and LNG export ships. This move is seen as an important step by the Trump administration to strengthen domestic industrial competitiveness, revitalizing the U.S. shipbuilding industry, and countering the unfair trade practices of the Chinese Communist Party.
Before implementing this action, the U.S. conducted a nearly year-long investigation under Section 301 of the Trade Act of 1974 in response to industry complaints about China’s unfair practices in the shipping and shipbuilding industries.
The USTR pointed out that over the years, China has intentionally established dominance in the shipping, logistics, and shipbuilding industries through subsidy policies and industrial control, damaging U.S. commercial interests, weakening the competitiveness of market-oriented enterprises, and posing risks to supply chain security. According to data from the Center for Strategic and International Studies (CSIS), China currently owns about one-fifth of the world’s commercial fleet and accounts for over half (53%) of global commercial shipbuilding capacity, surpassing the total of all other countries combined.
U.S. Trade Representative Jamieson Greer stated, “Shipping and maritime transport are crucial to U.S. economic security and trade flows. The actions by the Trump administration will reverse China’s long-standing dominance in this field, respond to potential threats to the supply chain, and send a signal of market demand for U.S. shipbuilding.”
This move by the Trump administration signifies a comprehensive phase of protection and rebuilding of U.S. shipbuilding policy, potentially impacting global supply chains and the shipping industry in the medium to long term. As the U.S. continues to strengthen its energy and strategic material transport autonomy, the competitive dynamics between the U.S. and China in the global shipping industry may continue to intensify.
The fee measures will officially take effect on October 14, 2025, with a 180-day period where no fees will be charged as a buffer for the industry. Subsequently, the related fees will be gradually increased on an annual basis.
Firstly, for all operators using Chinese-built ships (regardless of nationality), they will be charged based on the “entire voyage to the U.S.” (per U.S. Voyage, referring to the process from a ship entering U.S. territorial waters until the completion of all stops). The fee standards are as follows, charging the higher of the two:
Starting at $18 per net ton, increasing annually to $33 by 2028;
Or starting at $120 per container, increasing annually to $250 by 2028.
The USTR stated that each ship will only need to pay this fee a maximum of five times per year to prevent excessive burdens on vessels with frequent round trips.
In addition to taxing Chinese-built vessels, the Trump administration will also establish a separate fee mechanism for ships owned or operated by China.
According to the USTR announcement, any ship owned by a Chinese entity or registered in China, if docking in the U.S., its shipowners or operators will have to pay port service fees based on the net tonnage of the entire voyage into the U.S.
This fee will be implemented starting from October 14, 2025, with an annual increment: charging $50 per net ton in 2025, increasing by $30 per net ton each year, reaching $140 per net ton starting in 2028.
In order to incentivize U.S.-made shipbuilding, this action will also levy charges on non-U.S.-built vehicle carriers and LNG vessels.
Starting from October 2025, if foreign-built vehicle carriers are used, a fee of $150 will be collected for each car imported into the U.S.
However, if operators order and receive U.S.-built car carriers that meet the requirements, this fee may be deferred for up to three years.
Starting from 2028, the USTR will also set a domestication threshold for U.S. LNG export ships.
At least 1% of LNG export volume must be transported by U.S.-built ships, with this proportion gradually increasing every two years, reaching 15% by 2047.
Simultaneously, the Trump administration has tightened the definition of “U.S.-made ships.” According to the announcement, all major components of the hull and superstructure must undergo complete processes within the U.S., including all stages from steel smelting to coating treatment, and key ship components must also be made in the U.S.
This definition is stricter than the current Jones Act standard. It is believed that the tightening of this definition aims to exclude the shipbuilding industry’s reliance on Chinese components.
While this action imposes high fees on most Chinese-built ships, the USTR has outlined several exemption conditions to alleviate operational pressures on some vessels.
The announcement stated that ships participating in transportation plans led by the U.S. Maritime Administration (MARAD) or engaged in short-range maritime services may be exempt from these fee requirements. Empty inbound ships, small vessels below a certain capacity threshold, and specific purpose-built vessel types may also be eligible for exceptions.
Moreover, each ship will only need to pay this fee a maximum of five times per year, allowing vessels with high-frequency trips to retain flexibility in transport planning to prevent excessive accumulation of operating costs.
In addition to ship fees, the USTR has indicated potential expansion of restrictions on Chinese-made port equipment, incorporating them into additional tariff scope.
According to the announcement, in the future, imports of ship-to-shore cranes, containers, and chassis and other cargo handling equipment from China may face a new round of tariffs ranging from 20% to 100%.
However, this part has not been finalized and is currently under public opinion solicitation according to the President’s Maritime Executive Order.
The USTR explicitly stated in the announcement that China currently holds an overwhelming market share in ship-to-shore cranes and related cargo handling equipment, posing potential strategic risks to the U.S.
The USTR emphasized that excessive reliance on Chinese-made equipment not only weakens the resilience of U.S. supply chains but also provides China with the opportunity to intervene in critical infrastructure.
This action under Section 301 stems from a joint petition submitted by five major U.S. labor unions in March 2024. The unions that submitted the petition include the United Steelworkers (USW), the International Association of Machinists and Aerospace Workers (IAM), the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers (IBB), the International Brotherhood of Electrical Workers (IBEW), and the Maritime Trades Department of the AFL-CIO.
The USTR ultimately ruled earlier this year that China’s actions constitute unfair trade practices that require further action.
U.S. labor unions generally welcomed Thursday’s action, calling it a “concrete measure to revitalize domestic shipbuilding” and pledging to continue monitoring the policy’s implementation.
However, some businesses, including shipping companies, trade organizations, and importers, are concerned that this move will increase costs, raise consumer prices, and potentially impact U.S. port workers.
The USTR stated that public opinion consultations will be open starting immediately, with a deadline of May 19, 2025. It is expected that after the final announcement, all measures will take full effect 180 days later.