While the U.S. and China have agreed to give their trade truce an extra two months of breathing room into January, the status of postponed port calling fees that were tethered to last year’s agreement is less clear.
The countries suspended fees set to be placed on each other’s vessels for one year as a condition of the truce, which Presidents Donald Trump and Xi Jinping brokered last October in Busan, South Korea.
The U.S. Trade Representative’s (USTR) suspension on Chinese-built, -operated and -owned ships is set to expire on Nov. 9 at 11:59 p.m. Eastern time. But the government agency has not issued a formal notice within the Federal Register to extend the fee pause. The White House’s fact sheet from last week’s meeting between Trump and Xi in Washington did not mention port fees or vessel charges.
Related Stories
Sourcing Journal reached out to the USTR’s office.
Ahead of last week’s meeting, more than 200 trade associations including the National Retail Federation (NRF), American Apparel & Footwear Association (AAFA), Footwear Distributors & Retailers of America (FDRA) and the World Shipping Council (WSC) urged the heads of state to extend the suspension again.
“Resuming the Section 301 vessel fees at this time would add another cost layer to an already strained transportation system. Because China-built vessels represent a meaningful share of global ocean carrier capacity, the practical effect of the tariffs and fees would not be limited to a narrow set of market participants,” said the letter. “Instead, the costs would ripple across shipping networks, affect vessel deployment decisions, and increase uncertainty for businesses that have limited ability to control the ownership, operation, or construction history of the vessels used to transport their goods.”
The letter was signed by maritime transportation stakeholders including importers, exporters, manufacturers, agriculture and farming groups, logistics providers and freight forwarders, customs brokerages and trucking firms, among others.
The associates stated their case that a further delay would benefit both importers and exporters, particularly when it came to costs, which have gotten higher in areas including ocean freight, trucking, warehousing and insurance.
“For importers, it would help avoid new transportation surcharges that increase landed costs, disrupt purchasing decisions, and place additional pressure on prices for consumer goods, inputs, and components,” the signatories said. “For exporters, including agricultural producers and manufacturers, avoiding new fees would help preserve reliable and cost-effective access to foreign markets, reduce the risk of retaliatory or reciprocal measures, and support the competitiveness of U.S.-origin goods abroad.”
The fees were initially levied by the USTR last October, months after the office concluded a nine-month probe that found China had an “unreasonable” dominance over the global maritime, logistics and shipbuilding sectors.
Chinese vessel operators including Cosco Shipping and subsidiary Orient Overseas Container Line (OOCL) were the hardest hit companies in the two weeks before last year’s agreement led to the postponement of the fees. The ocean carriers racked up nearly $43 million in surcharges in the first week alone, which would have amounted to more than $2 billion over a full year.
Under the briefly enacted fee structure, operators including Cosco, OOCL, China United Lines and Hede Shipping had to pay base surcharges of $50 per net ton for every voyage that stopped at U.S. ports. According to the original notice, the charges were set to escalate every year through 2028, when the figure would total $140 per net ton.
Chinese-built ships owned by other carriers also were charged $18 per net ton fee, but companies like Mediterranean Shipping Company (MSC), Maersk and CMA CGM among others largely avoided the extra payment by moving non-Chinese vessels into U.S.-bound service rotations.
Although China initially established its own fees on U.S. ships in retaliation to the American levies, the country scrapped them altogether as part of last October’s Busan Agreement.
In their letter to the USTR, the associations asserted that the year-long suspension demonstrated that vessel fees alone are not a strategy for rebuilding the maligned U.S. shipbuilding sector, which has fallen behind China in recent decades.
“Extending the suspension would provide additional time for policymakers to pursue durable solutions that strengthen U.S. maritime competitiveness without increasing costs for American businesses, exporters, and consumers,” said the letter. “It would also provide USTR additional time to continue negotiations with China, coordinate with allies and partners, and pursue policies that expand U.S. shipbuilding and maritime capabilities without imposing near-term costs on American freight users. A durable solution should strengthen domestic maritime capacity while preserving the reliable, affordable transportation services that U.S. companies need to compete in global markets.”
