New U.S. Port Fees Could Sink Shipping & Raise Costs

_{The U.S. Wants to Hit Chinese Ships with Big Port Fees}

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The USTR is preparing a plan to slap hefty fees on Chinese-built and operated ships coming into U.S. ports. The idea is to push back against China’s dominance in shipbuilding, which has been fueled by government subsidies. If this goes through, it could have some big ripple effects across global trade.

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What's the big deal?

• Massive Port Call Fees: Chinese-owned ships could get hit with fees up to $1 million per entry, while ships built in China but owned by other companies could see even higher fees—up to $1.5 million per entry. The goal? Level the playing field by making it more expensive to use Chinese-built vessels.
• Higher Shipping Costs: Given China's recent dominance in ship building, importers are sure to see their costs spike, which could trickle down to higher prices for consumer goods like electronics, cars, clothing, and even energy.
• Pressure to Buy Ships Elsewhere: Shipping companies may start shifting orders to South Korean or Japanese shipbuilders to avoid future penalties. But since ships take years to build, this wouldn’t be a quick fix.
• Push for U.S.-Built Ships: The plan also includes a rule that would require a certain percentage of U.S. exports to be transported on U.S.-flagged and U.S.-built ships—starting at 1% and scaling up to 15% over seven years. Sounds great for reviving U.S. shipbuilding, but the industry would need a serious boost to meet demand.

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What Could Happen If This Goes Through?

• Higher Shipping Prices: Steam ship lines will simply pass the levied fees on to shippers, increasing container costs by 25% or more. Many experts believe this will cause a $2,000+ spike in FFE container prices.
• Supply Chain Headaches: Importers may try to front load orders and rush product in before the fees are instituted, which could cause massive delays and dwell times at major US ports.
• Potential Trade War Escalation: Coupling this with the additional tariffs waged on Chinese goods, we could be looking at new tariffs or restrictions on U.S. exports to China, making things even more complicated.

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For now, this is just a proposal, and a public hearing is set for March 24 to get feedback before any final decisions are made. But if it moves forward, expect some big shifts in how goods move around the world.

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