The United States Trade Representative (USTR) has announced targeted measures aimed at revitalizing the American shipbuilding industry and addressing what it describes as China’s unreasonable acts, policies, and practices designed to achieve dominance in the maritime, logistics, and shipbuilding sectors.
These responsive actions follow a comprehensive year-long investigation conducted under Section 301 of the Trade Act of 1974. The investigation involved a two-day public hearing convened by the USTR, the receipt of nearly 600 public comments, and extensive consultations with government agency experts and advisors cleared by the USTR.
“Ships and shipping are fundamental to American economic security and the unimpeded flow of commerce,” stated Ambassador Greer. “The Trump administration’s actions are a first step towards reversing China’s dominance, mitigating threats to the U.S. supply chain, and signaling a clear demand for vessels built in the United States.”
The announced measures seek to balance decisive action with the crucial need to minimize disruption for American exporters. The implementation will occur in two distinct phases:
Phase 1 (Initial 180 Days): All applicable fees will be set at $0. This initial period is likely intended to allow stakeholders to adjust to the upcoming changes.
Phase 1 (Post 180 Days): Following the initial period, the following fees will be implemented and will increase incrementally over subsequent years:
Fees on vessel owners and operators based in China: These fees will be based on the net tonnage per U.S. voyage.
Fees on operators of Chinese-built ships: These fees will be levied based on either net tonnage or container capacity.
Fees on foreign-built car carrier vessels: To incentivize the use of U.S.-built car carriers, fees will be imposed based on the capacity of foreign-built vessels.
Phase 2 (Effective After 3 Years): This phase focuses on incentivizing the domestic construction of specialized vessels:
Limited restrictions on foreign vessels transporting Liquified Natural Gas (LNG): To encourage the use of U.S.-built LNG vessels, restrictions on foreign-flagged vessels in this trade will be gradually introduced, increasing incrementally over 22 years.
Furthermore, the USTR has indicated that it is seeking public input on proposed tariffs targeting ship-to-shore cranes and other cargo handling equipment. This move aligns with the President’s Maritime Executive Order, suggesting a broader strategy to strengthen the domestic maritime industry.
Background on Section 301:
Section 301 of the Trade Act of 1974, as amended, provides a mechanism to address unfair foreign trade practices that negatively impact U.S. commerce. This legislation allows interested parties to petition the USTR to investigate foreign government actions, policies, or practices and to take appropriate responsive measures. Specifically, Section 301(b) can be invoked to counter foreign government actions deemed unreasonable or discriminatory that burden or restrict U.S. commerce.
This multi-phased approach by the USTR signals a determined effort to reshape the landscape of the maritime and shipbuilding industries, aiming to bolster domestic capabilities and reduce reliance on foreign entities, particularly China. The long-term effects of these measures will be closely watched by stakeholders across the global trade network.
