USTR Takes Action on China’s 'Targeting' of US Maritime and Logistics Sectors

The office of the United States Trade Representative has taken targeted action to "restore American shipbuilding and address China’s unreasonable acts, policies, and practices to dominate the maritime, logistics, and shipbuilding sectors."

These responsive actions come after a year-long Section 301 investigation, which included USTR convening a two-day public hearing, receiving nearly 600 public comments, and consulting with government agency experts and USTR cleared advisors.

"Ships and shipping are vital to American economic security and the free flow of commerce," said Ambassador Greer. "The Trump administration’s actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships."

The actions will occur in two phases:

For the first 180 days the applicable fees will be set at US$0.

In the first phase, after 180 days:

• Fees on vessel owners and operators of China based on net tonnage per US voyage, increasing incrementally over the following years;

• Fees on operators of Chinese-built ships based on net tonnage or containers, increasing incrementally over the following years; and

• To incentivize US-built car carrier vessels, fees on foreign-built car carrier vessels based on their capacity.

The second phase actions will not take place for 3 years:

• To incentivize U.S.-built liquified natural gas (LNG) vessels, limited restrictions on transporting LNG via foreign vessels. These restrictions will increase incrementally over 22 years.

In addition, USTR is seeking public comments on the proposed tariffs on ship-to-shore cranes and other cargo handling equipment, in line with the US President’s Maritime Executive Order.

Specifically, USTR found China’s targeting for dominance unreasonable because it displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on China, increasing risk and reducing supply chain resilience.

China’s targeting for dominance is also unreasonable because of Beijing’s extraordinary control over its economic actors and these sectors.

USTR found that China’s targeting for dominance burdens or restricts U.S. commerce by undercutting business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors; restricting competition and choice; creating economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the U.S. economy; and undermining supply chain resilience.

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