【Text by Observers Network, Wang Yi】The "poisonous plan" of the United States to impose additional port fees on ships built in China is about to take effect on October 14, but the specific implementation details are unclear, and several U.S. shipping industry professionals have recently complained that the policy remains "a mystery".
On September 29, the Chinese State Council announced its decision to amend the "Regulations of the People's Republic of China on International Shipping". Hong Kong's South China Morning Post analyzed on the 30th that China has taken a preemptive strike, clearly stating that it will retaliate against any country or region that implements or supports discriminatory measures.
The amended content published on September 29 states: "Any country or region that takes or assists in taking discriminatory prohibitions, restrictions, or other similar measures against operators, vessels, or crew members of international maritime transport and its auxiliary businesses in the People's Republic of China shall, except where relevant treaties or agreements provide sufficient and effective remedies, be subject to necessary countermeasures by the Chinese government based on the actual situation."
The relevant measures "include, but are not limited to, charging special fees to vessels from the country or region docking at Chinese ports, prohibiting or restricting the entry and exit of vessels from the country or region into Chinese ports, and prohibiting or restricting organizations and individuals from the country or region from obtaining related data, information, and operating international maritime transport and its auxiliary businesses entering and leaving Chinese ports."
According to a report by the South China Morning Post, Guotai Junan Futures Co., Ltd. stated in a report on the 30th that the U.S. Trade Representative's Office (USTR) had previously issued a "Section 301 investigation" report targeting China's shipping, logistics, and shipbuilding sectors, and China's latest move can be seen as a response to this investigation.
The report said that Ray Yue, an analyst from Haitong Futures' shipping division, also believes that the Chinese countermeasures may target American vessels, including those flying the American flag or owned by American companies, especially the American Matson Navigation Company. This company has long operated trans-Pacific routes, including shipping services from China to Southern California, USA. Data shows that Matson ranks 29th among global container carriers, accounting for 0.2% of global capacity.
The number of vessels flying the American flag globally is not high. According to a recent UN report, this proportion accounts for 0.6% of the global deadweight tonnage, while vessels flying the flags of mainland China and Hong Kong together account for 13.9%. Although the number of American vessels is not high, the South China Morning Post analyzed on the 30th that if the definition of "American background" is expanded to include vessels financed, listed in the U.S., or leased by American companies, the impact could quickly expand.
Jayendu Krishna, a director at Drewry Shipping Advisory, said that U.S. private equity, banks, and alternative financing institutions are deeply involved in shipping assets. Without knowing the exact definition of the scope covered, it is difficult to determine the impact, but "the devil is in the details."
The China Shipowners Association expressed full support and firm endorsement of the State Council's decision to amend the "Regulations of the People's Republic of China on International Shipping" on the 30th. The association pointed out that some countries are abusing the "Section 301 investigation" in the shipping sector, implementing discriminatory restrictive measures against Chinese enterprises to charge port fees. Chinese shipowners firmly oppose this and will legally protect their rights and interests. At the same time, they will overcome difficulties and continue to ensure the stability of the international shipping logistics supply chain and maintain normal international trade and economic order.
Container ships docked at the port, Visual China
On the other hand, the U.S. measure of imposing port fees on Chinese ships announced in April remains "a mystery". According to the announcement at that time, in the first phase, starting from October 14 this year, the U.S. will charge so-called "maritime service fees" to any vessel operated by Chinese operators or owned by Chinese entities based on a standard of $50 per net ton. This amount will increase by $30 annually over three years, reaching $140 per net ton by 2028.
In the second phase starting from 2028, the U.S. Trade Representative's Office will restrict foreign-built vessels from engaging in liquefied natural gas transportation. In the following 22 years, it will gradually require an increase in the percentage of vessels flying the American flag and operated by the U.S. until the percentage reaches 15% by 2047.
However, the specific implementation details of this policy remain unresolved. The U.S. Customs and Border Protection (CBP) will be responsible for collecting the so-called "port fees", but the operational procedures, applicable scope, and other issues are still unclear. At the recent Marine Money Asia conference held in Singapore, several industry representatives openly stated that the U.S. port fee policy is "a mystery".
Andrew MacAllister, a partner at Holland & Knight law firm, pointed out that U.S. authorities had previously promised to provide answers to frequently asked questions regarding the fee process, but have yet to publish them.
Regarding whether vessels financed through Chinese leasing companies would be included in the scope of the fee, Christoforos Bisbikos, a partner and head of the Asian financing department at Watson Farley & Williams law firm, also said that it is currently "unclear".
Despite the unclear implementation details, some shipping companies have already made plans in advance. According to a report by Maritime Trade News on September 25, major shipping giants such as Denmark's Maersk Group and France's CMA CGM Group have announced that they will not add surcharges to cargo bound for the U.S. on October 14. Some non-Chinese shipping companies have stated that they will divert Chinese-built vessels to routes that do not call at the U.S. While China Shipping Group and Orient Overseas Container Line have pledged to continue serving customers on U.S. routes.
According to a report by Reuters on the 25th, despite the U.S. imposing so-called "port service fees" on Chinese ships in an attempt to curb China's maritime dominance, global shipping companies are still ordering merchant ships from Chinese shipyards at full speed.
A new report released by the Center for Strategic and International Studies (CSIS) on the 24th showed that according to total tonnage, Chinese shipyards accounted for 53% of global new ship orders in the first eight months of this year, which is comparable to the level in 2023 before the USTR initiated the investigation.
"Shipping companies are basically conducting business as usual," said Brian Hart, a researcher at CSIS' "China Power Project" and one of the authors of the report. "So far, these policies have not significantly led shipping companies to transfer orders away from China."
Regarding the so-called "port fee" that the U.S. plans to collect, the Chinese Foreign Ministry spokesperson has repeatedly stated that measures such as charging port fees and imposing tariffs on cargo handling equipment are self-harming, which not only increases global shipping costs, disrupts the stability of the global supply chain, but also increases inflationary pressures in the U.S., harming the interests of American consumers and businesses, and ultimately failing to revitalize the U.S. shipbuilding industry. We urge the U.S. to respect the facts and multilateral rules, and immediately stop these wrong practices. China will take necessary measures to safeguard its legitimate rights and interests.
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