by Manal Barakat, SeaNewsEditor

In January, the US Trade Representative's Office (USTR) investigated China's growing domination of the global shipbuilding, maritime, and logistics sectors.

The office determined that China’s policies in the maritime, logistics, and shipbuilding sectors are “unreasonable” and could “burden or restrict US commerce.”

According to the findings, China increased its share in global shipbuilding tonnage from 5% in 1999 to over 50% in 2023.

Meanwhile, US shipyards were building about 5% of the world’s tonnage in the 1970s. They currently build just five per year.

As a result, the office proposed several shipping restrictions, including fees on Chinese-built vessels calling US ports. In extreme cases, the fees could be as high as USD 1.5 million.

The Federal Register Notice, published on Friday, 21 February, contains - among others - the following proposals:

• For Chinese operators, the proposed rate is up to USD 1 million per entrance to a US port or up to USD 1000 per net tonne of the vessel’s capacity.
• For other operators, the proposed rate could go up to USD 1.5 million for Chinese-built vessels entering US ports.

Another calculation method would consider the percentage of Chinese-built vessels in that operator’s fleet. Depending on the operator's fleet, the fees range from USD 500,000 to USD 1 million.

On the other hand, the USTR proposed that up to USD 1 million could be refunded for every entry to a US port by a US-built vessel deployed by the impacted operator.

Possible impact on shipping

While the suggested measures are yet under consideration and will only be discussed in a public hearing after 24 March, the shipping industry is already raising concerns about their impact.

Shipping analysis firm Linerlytica mentioned in its latest report that the fees could “trigger moves to switch out Chinese built ships from US trades that would cause widespread disruptions over the coming months.”

Because Chinese operators account for 17% of US imports from the Far East, their potential exit from the market “would create a void,” says Linerlytica.

However, it could benefit Taiwanese and Korean carriers, whose fleet comprises only a small proportion of Chinese-built vessels.

This new development will clearly create additional uncertainty in capacity deployment and supply and demand in most trades, in addition to the ongoing alliance's reorganization.

If adopted, the measures may affect supply chain planning and operations in the coming months.