As the new Trump Administration continues to implement changes, one idea being explored has sparked strong pushback from across industries, including agriculture. The U.S. Trade Representative’s (USTR) office has proposed slapping Chinese-built vessels with a series of new fees that could add up to more than $1 million for every U.S. port call.
The proposed feeds are in response to an investigation opened under the Biden administration last year looking into China’s dominance in the maritime, logistics, and shipbuilding sectors. The USTR opened the investigation after being petitioned by five U.S. labor unions. Katherine Tai, who was head of the USTR’s office under the Biden administration, said at the time that the findings of the investigation warranted action.
In February, President Trump’s USTR office followed up with a proposed a plan to impose fees on Chinese-built and Chinese-flagged ships in order to counter the country’s dominance in global shipbuilding and logistics, while also bolstering U.S. shipping. Vessels operated by Chinese companies would face up to a $1 million fee per port call. Ships built in China would have to pay fees as much as $1.5 million per port call. And any shipping line that has placed more than 50% of its new vessel orders with Chinese shipyards would face up to a $1 million port entry fee.
The Trump Administration says the fees will be used to stabilize the U.S. shipbuilding industry. The administration says the plan also would reduce the global dominance of China’s shipyards.
In a letter to U.S. Trade Representative Jamieson Greer, a coalition of more than 300 business groups representing U.S. importers and exporters, manufacturers, farmers, retailers, railroads, and ports warned that the proposed actions will not deter China’s broader maritime ambitions and will instead directly hurt American businesses and consumers.
The groups said shipping lines would likely take steps to minimize or avoid the port entry fees. First, they would drop calls at smaller U.S. ports in favor of discharging containers at large ports like Los Angeles and Long Beach, California, and New York and New Jersey. Second, they might divert 5% of their port calls to Canadian and Mexican ports.
“If the cost of calling a U.S. port is suddenly much higher, some carriers may feel pressure to divert U.S.-bound ships facing those higher costs to a Mexican or Canadian port instead, forcing their customers to transport their goods by truck or rail from there to U.S. destinations. The ability to do this, however, is also constrained by the infrastructure and prevailing business load at these ports,” the report said.
Agriculture groups have warned the port fees would have a devastating effect on U.S. farmers, with soybean exports at particular risk. Over 21% of all vessels calling at U.S. ports in 2024 were Chinese-built, according to American Farm Bureau Federation (AFBF). The American Soybean Association (ASA) notes that more than 50% of domestic soybean production is exported and the U.S. doesn’t have the capacity to export beans at the rate proposed by the USTR.
Currently, there are fewer than 14 available U.S. bulk vessels globally for moving grain and oilseed commodities and shipbuilders in the country do not produce commercial vessels in meaningful numbers. Over the last five years, U.S. shipyards have added less than 100,000 dry tonnage capacity.
The USTR this week held hearings about the port fee proposals, with some 50 stakeholders on both sides of the issue testifying. It’s not clear when the fees, if enacted, might go into effect but some speculate it could be as soon as April 2, when the Trump Administration is slated to unveil its plans for “reciprocal” tariffs.
Opponents to the proposed port fees commissioned a study from Trade Partnership Worldwide that includes more in depth analysis on the potential impact to U.S. industries and the overall U.S. economy. The study concluded that U.S. agriculture exporters and workers would be particularly hard-hit, with exports of major agriculture products like wheat, rice, corn, oilseeds and cotton dropping dramatically — by double digits in the cases of wheat, rice and soybeans. U.S. exporters will lose competitiveness to exporters in Brazil, Canada, Russia and Australia. It also finds that the proposed fees would have a net negative impact on the U.S. economy. The full report is HERE. (Sources: AFBF, The Wall Street Journal, DTN, Politico)
What do you think China will response to Trump’s latest tariff? 😉🤔 Thanks