【Text by Observers Net, Yuan Jiaqi】

On October 10, the Chinese Ministry of Transport announced that starting from October 14, it will charge "Special Port Service Fee" on ships related to the United States, in response to the U.S. serious violation of international trade principles and the China-U.S. maritime agreement, and its unreasonable and erroneous practice of imposing port service fees on ships involving China. The Chinese Ministry of Commerce issued a statement late on October 10, emphasizing that the relevant countermeasures aim to maintain a fair competitive environment in the international shipping and shipbuilding markets, and are a "legitimate defense" act.

According to Reuters, over the past two decades, China has become the world's largest shipbuilding country, with its domestic large shipyards capable of undertaking both commercial and military shipbuilding projects. Desperate and acting in haste, Washington announced in April this year that it would impose charges on ships involving China as part of an overall initiative to promote the revival of the U.S. shipbuilding industry and weaken China's commercial shipping and naval strength.

The spokesperson for the Chinese Ministry of Transport criticized on October 10, "The U.S. approach ignores the facts and fully exposes its unilateralist and protectionist nature, which is clearly discriminatory, seriously damaging the legitimate interests of China's shipping industry, seriously disrupting the stability of global supply chains, and severely undermining the international trade and economic order. China will resolutely take countermeasures against the U.S.'s wrong practices according to law, promoting the construction of a fair and just international shipping market order and maintaining the safety and stability of the international logistics supply chain."

Reuters cited analysts who pointed out that China's countermeasures indicate that the U.S. and China are still unable to break through the current tariff "ceasefire" state. The Stockholm talks between the U.S. and China on August 12 resulted in a mutual suspension of the 24% tariffs for 90 days, which will end on November 9.

A international enterprise selling soybeans to China said, "This measure indicates that China is still angry at the U.S., and they are unlikely to resume importing agricultural products from the U.S. in the short term... This year, China's soybean processing companies may give up using U.S. soybeans."

He added that the impact of China's countermeasures on agricultural product trade may be limited. After the Trump administration initiated the tariff war, the scale of China's imports of agricultural products and energy products from the U.S. had already been significantly reduced.

According to Bloomberg, after the announcement of the new regulations by China, there was a chain reaction in the global logistics industry. On Friday, a small number of oil tankers originally scheduled to deliver goods to Chinese ports temporarily canceled their bookings. In addition, the rental costs of dry bulk carriers transporting coal and iron ore also increased.

Bloomberg's calculation shows that the threshold for the fee charged by China is 400 RMB per ton (approximately 56 USD), which means that a giant oil tanker needs to pay an additional approximately 6.2 million USD (about 44.16 million RMB) each time it docks at a port. Analysts from investment bank Fearnley Securities wrote in a report, "So far, the impact has been very significant."

"The U.S. did this first, and China is just retaliating. It's just another round of tit-for-tat negotiation strategy," said Peter Alexander, Managing Director of consulting firm Z-Ben Advisors, to the American Consumer News and Business Channel (CNBC).

"The Trump administration has always underestimated China, and this must stop. When making policies, they seem to rarely consider the secondary and tertiary chain reactions that policy choices might trigger," Alexander added, "China has the ability to make equivalent responses, and has already shown the willingness to take direct action. Have Americans not learned anything in the past six months? Obviously not."

On October 10, Qingdao Port in Shandong Province, Qingdao Port is busy with foreign trade operations, and cargo ships are loading and unloading containers. Visual China

According to Hong Kong's South China Morning Post, Linerlytica, a container market intelligence company, released a report on Monday stating that due to the size of the U.S. fleet operating or owning in China, compared to the relatively smaller size of the Chinese fleet operating in the U.S., the actual impact of China's countermeasures may be "relatively limited".

However, the Hong Kong media pointed out that this analysis report did not include the entities with more than 25% ownership by the U.S. mentioned in China's statement. The report believes that since U.S. private equity companies, banks, and alternative financial institutions usually hold large shares in the shipping industry, the total amount of fees collected could be much higher than the current estimate.

Jayendu Krishna, a director at Drewry Shipping Advisory, mentioned this key element during an interview and bluntly stated, "The devil is in the details."

"If ships financed by U.S. companies, listed on U.S. stock exchanges, or leased by U.S. entities are deemed to be owned by the U.S., this move could have a major impact," he explained.

Kun Cao, Vice President of consulting company Reddal, also warned the Associated Press that China's countermeasures "are not symbolic actions."

"The new regulations clearly target any ships with substantial ties to the U.S., whether it is ownership, operation, flag, or construction involving the U.S., and the fees increase significantly with the ship's tonnage," he added, "The real impact will fall on U.S.-owned and operated vessels."

Bloomberg also noted that although many of the world's largest oil tanker operators have their headquarters outside the U.S., some of them are listed in the U.S. and have significant U.S. shareholders.

Omar Nokta, an analyst at Jefferies Group, stated in a report, "The impact of China's new charging framework should not be underestimated, as it will affect listed companies, especially those listed in the U.S. market with U.S. domestic investment funds holding 25% or more."

On the other hand, several U.S. shipping industry professionals have complained that the U.S. measures to impose port fees on Chinese ships have remained "a fog", and issues such as operational procedures and scope of application remain unclear, leaving people "in the dark".

At the recent "Marine Money Asia" U.S. shipping finance forum held in Singapore, Andrew MacAllister, a partner at the U.S. law firm Holland & Knight, pointed out that U.S. authorities had previously promised to provide frequently asked questions about the fee process, but have not yet published them.

Regarding whether ships financed through Chinese leasing companies would be included in the charging range, Christopher Ros Bisbikos, a partner and head of the Asian financing department at the Singapore law firm Watson Farley & Williams, also stated that it is currently "unclear" on this issue.

Some shipping companies have already made plans. According to an earlier report by Maritime Trade News, world shipping giants Denmark's Maersk Group and France's CMA CGM Group have announced that they will not charge additional fees for U.S. route cargo on October 14. Some non-Chinese shipping companies said they would transfer Chinese-built ships to routes that do not call at U.S. ports. COSCO Shipping Group and Orient Overseas Container Line Limited stated that they will continue to serve U.S. route customers.

In Linerlytica's report on Monday, it also stated that most non-Chinese operators can avoid U.S. fees by adjusting their fleet deployment. Within the October charging window, only four non-exempt ships are planned to call at U.S. ports.

Meanwhile, the U.S.'s sinister attempt to use such a "poisonous plan" to curb China's maritime dominance has failed. Latest data shows that global shipping companies are still ordering merchant ships from Chinese shipyards at full speed.

According to a latest report released by the U.S. Center for Strategic and International Studies (CSIS) in September, quoted by Reuters, China's shipyards accounted for 53% of the global new ship orders in the first eight months of this year, which is comparable to the level in 2023 before the USTR launched the investigation.

"Shipping companies are basically continuing their business as usual," said Brian Hart, one of the authors of the report, "so far, these policies have not significantly caused shipping companies to shift orders from China."

On October 10, regarding China's countermeasures, the Chinese Ministry of Commerce responded, stating that on April 17, U.S. Trade Representative Office announced the final measures of the 301 investigation into China's maritime, logistics, and shipbuilding sectors. The measures targeting port fees for ships involving China will be implemented on October 14. The U.S. measures are a typical unilateralist act, with obvious discriminatory characteristics, seriously damaging the interests of Chinese enterprises. China is strongly dissatisfied with this and has repeatedly emphasized its firm opposition stance.

To safeguard the interests of domestic related industries, the relevant Chinese departments, according to the provisions of the "Regulations of the People's Republic of China on International Shipping", will collect special port service fees on ships involving U.S. flags, U.S. built, U.S. companies owning, participating in or operating. These measures will be officially implemented at the same time as the U.S. measures to impose port fees on ships involving China on October 14.

China emphasized that the relevant countermeasures aim to maintain a fair competitive environment in the international shipping and shipbuilding markets, and are a "legitimate defense" act. It hopes that the U.S. will carefully consider and correct its wrong practices, work together with China, and find solutions through equal consultation and cooperation.

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