On 17 April 2025 the US Trade Representative (“USTR”) published a Notice of Action and Proposed Action (the “USTR Notice”) implementing fees on US port calls for certain categories of non-US built ships. The implications are far from clear at present and there are a number of ambiguities to be resolved, not least the definition of “vessel operator”.
As these issues become clearer and clarification is received, further information will be published. In the meantime, this article provides a factual summary of the proposed actions as currently understood.
Introduction
A report from the office of the U.S. Trade representative (“USTR”) was published on 16 January 2025 (link here) entitled “Report on China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance”. In that report, the U.S. determined that the maritime industry was of key strategic importance and China had gained a significant foothold in the industry.
During March 2025, the USTR held hearings asking affected parties to participate and make representations. These would then be taken into consideration when the final decisions were madeas what action the U.S. government would take in response.
The USTR has now published their proposed action (here) which takes into account some of the concerns that were raised in the March hearings.
These are far reaching proposals which may have a material impact on members’ business. The implications are far from clear at present and there are a number of ambiguities to be resolved, not least the definition of “vessel operator”. As these issues become clearer and clarification is received, further information will be published.
In the meantime, the following is a factual summary of action to be taken as currently understood.
What is being proposed?
The proposals cover a number of issues including reliance on logistical software and manufacture of port cranes. There are four broad areas that concern ship owners and operators directly.
i) Owners and operators domiciled in China;
ii) Owners and operators that have Chinese built ships;
iii) Owners and operators of vehicle carriers; and
iv) Owners and operators of LNG carriers.
In each case, owners and operators are defined as the entity that appears in the Vessel Clearance Statement (CBP Form 1300). The entity on the CBP Form 1300 is the party listed on the Certificate of Financial Responsibility (Water Pollution) (or ‘COFR’) under the Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act 1980. Under the COFR regime, where there are multiple operators, the parties can generally agree to designate any of those ‘operators’ as the responsible party. If a similar approach is adopted under the proposals, this may provide some ability to choose the identity of the ‘operator’.
Owners and Operators connected to China
The definition of owners and operators connected to China is very wide and includes where an ‘owner’ or ‘operator’:
i) Declares itself as Chinese[1] on the vessel entrance or clearance statement;
ii) Has headquarters, or its parent has headquarters or their principal place of business is the PRC;
iii) Is owned by, or controlled by citizen(s) of the PRC;
iv) Is owned, controlled by an entity which is subject to the jurisdiction of or under the direction of the PRC which means :
a.the entity is a national or resident of the PRC;
b.the entity is organised under the laws or has its principal place of business in the PRC;
c. 25 % of the voting interest, board seats or equity is held directly or indirectly by any combination of the government of the PRC, Hong Kong, or Macau.
d. 25% of the entity’s voting interests, board seats or equity interests is held directly or indirectly by a combination of people that fall within the above three categories;
v) Is owned or controlled by an entity listed as a Chinese Military Company.
This definition may capture a large number of companies, although see above about the identity of ‘Operator’.
Implications
For those companies within the above definition, from 14 October 2025, a fee of US$50 per net ton of the arriving ship will be due for each port call in the U.S. up to a maximum of 5 charges per year, per vessel.
These fees will rise year on year for the next three years on 17 April each year by US$30 per net ton in line with the following table:
The meaning of ‘net ton’ is not entirely clear from the text. Given that Net Registered Tonnage is the tonnage figure requested on the CBP 1300 form, it appears likely that NRT is the figure on which the charges will be levied. If that is correct, it appears the levy will be the same for each port call for the same ship regardless of the cargo being brought into the United States.
The vessel operator will be liable to ensure that all fees due under these arrangements are collected and paid to the US Government.
Owners and Operators of Chinese Built Vessels
In this context, a Chinese built vessel will be one if the place of build stated in the CBP form is China, or if it meets the concept of a Chinese built ship in the context of U.S. Coast Guard regulations concerning foreign-built vessels pursuant to The Jones Act.
For the charges affecting these types of payee, they will be levied either per net ton of the arriving ship or per container discharged. Fees start to be levied from 18 October 2025 and thereafter increasing each 17 April for three years in line with the following tables:
The approach taken with containerships appears to be somewhat different. If ‘net ton’ refers to the Net Registered Ton, fees for ships carrying solid bulk cargo are fixed according to their dimensions, whereas container ships are to be charged according to how much cargo is landed.
There are other complications in this part of the regulation. If the owner of the Chinese built ship orders and takes delivery of a U.S. built ship, fee reimbursements (remissions) may apply for a maximum period of three years. For a ship to qualify as a U.S. built ship, the ship must be constructed in a U.S. yard with U.S. manufactured steel and all the major components (including engines, pumps, propellers etc.) must also have been manufactured in the United States.
These charges do not apply to the following exempted vessels or trades:
i) U.S. owned or flagged vessels enrolled in various maritime security programs;
ii) vessels arriving empty or in ballast;
iii) vessels of less than 4,000 TEU or 55,000 deadweight tons or an individual bulk capacity of 80,000 deadweight tons;
iv) vessels entering the continental U.S. from a voyage of less than 2,000 nautical miles from a foreign port or point;
v) U.S. owned vessels where they are beneficially owned by at least 75% by a U.S. person(s);
vi) specialist vessels for the transport of chemical substances in bulk liquid forms; and
vii) lakers.
Service fee on Foreign-Built Vehicle Carriers
The service fee for vehicle carriers applies regardless of place of build unless the place of build is the United States. The requirements for qualifying as a U.S built ship set out above also apply to this section.
From 14 October 2025, levies according to the car carrying capacity of the vessel on which cars arriving on foreign built car carriers arrive in the U.S. will apply. Unlike the tariffs set out above, these will not be increased year on year.
As with the regulations on foreign built vessels described above, Owners may be able to obtain a relief or rebate if they order and take delivery of a U.S. built car carrier, which appears likely to have a similar meaning to the one set out above.
LNG Carriers
For LNG carriers (set out in Annex IV of the USTR’s proposals) no charges are planned for the next three years. From April 2028, a certain proportion of an exporters’ LNG export must be carried on (initially) U.S. owned and flagged ships with a requirement later (from 2029) for there to be a U.S. based operation and U.S. mariners manning the ships.
This proportion of LNG increases on a percentage basis from 1% in 2028 to 15% by April 2047.
Summary
As can be seen by the above summary, the regulations are complex and nuanced and will need further detailed consideration over time to understand the implications, some of which may not yet be fully obvious.
For example, if container ships are doing an east and west coast rotation but have a technical call in Panama, will this be considered two separate calls for the purposes of charging?
Further updates and briefings, including on potential implications under charterparties and other industry contracts will follow as the issues become clearer.
In general, it appears the USTR did take comments from the public hearings into account, but whilst the current proposals are somewhat less onerous than initially anticipated, it is entirely possible things could change again as the proposals are implemented and thereafter. The current proposed charges are significant however and will have an impact on operations into the United States.
If you require further information, please feel free to contact the authors or your usual club contact.
Source: North Standard
