/Reuters Agency
The United States is one week away from imposing port tariffs on certain vessels linked to China, a measure expected to cost the top 10 shipping companies 3.2 billion dollars next year, as President Donald Trump seeks to counter the Asian country’s growing dominance of the seas.
“While some observers believe the October 14 deadline could be extended—or even canceled—as part of broader negotiations, the uncertainty has already unsettled shipping companies, adding another layer of geopolitical risk to fleet deployment strategies,” S&P said in a recent report.
The Trump administration stated that the tariffs imposed on vessels built, owned, or operated by Chinese entities will help fund the revitalization of the U.S. shipbuilding industry.
A law to establish this long-term funding is advancing in the U.S. Congress with broad bipartisan support.
In an update late last week, the U.S. Trade Representative warned vessel owners that they, and not the agency, are responsible for determining if the tariffs apply to them.
Vessels owned or operated by a Chinese entity will face a fixed fee of 80 dollars per net ton per voyage to the United States.
Non-Chinese operators of vessels built in China will be charged the higher amount of either 23 dollars per net ton or 154 dollars per TEU. Both fees apply to a vessel no more than five times per year, according to the maritime technology and data provider Alphaliner.
After strong industry pressure, the Office of the U.S. Trade Representative (USTR) significantly reduced the tariffs from the initial proposals, exempted many U.S.-based operators, and extended the deadline for applying tariffs to liquefied natural gas (LNG) carriers.
On the other hand, it expanded the tariffs to include any /roll-off car carrier not built in the United States, with exceptions for U.S.-flagged vessels.
Alphaliner estimated that the Chinese shipping company Cosco Shipping, including the fleet linked to Orient Overseas Container Line (OOCL), is the most exposed to these tariffs.
Tariffs for Cosco Shipping could reach 1.53 billion dollars next year, nearly half of the 3.2 billion projected for the top 10 shipping companies, it was reported.
Other companies, including the French CMA CGM, stated they have redeployed their China-built vessels to avoid the tariffs.
Meanwhile, Beijing has responded. Premier Li Qiang signed a decree committing to retaliate against any discriminatory measures towards Chinese vessels or crews.
Trump and Chinese President Xi Jinping are expected to meet at the Asia-Pacific Economic Cooperation (APEC) summit, scheduled from late October to November 1 in South Korea.
Last year, U.S. shipyards built fewer than 10 commercial vessels. Chinese shipyards, many of which build both commercial and military ships, produced more than 1,000.
