New Port Fees on Chinese Ships

Politico reports Port Fees are the Next Front in the Trade War.

The U.S.-China trade war has lurched from fragile truce to bare-knuckle brawl. It is about to intensify further when the two countries hike fees on each others' commercial ships Tuesday — a move that, on the U.S. side, could end up raising consumer costs and driving down imports from Asia.

Along with a new tussle over China's global chokehold on the supply of critical minerals — which prompted President Donald Trump to threaten 100 percent tariffs and new curbs on "all critical software" in retaliation — China's Ministry of Transport announced Friday that it is matching the Trump administration's planned increase in port fees on Chinese-owned and operated ships.

"This is symbolic — less than 1 percent of U.S. vessels docking in China annually are U.S.-flagged vessels, so the reality is this basically has no real impact," said Cameron Johnson, a senior partner at Shanghai-based supply chain consultancy Tidalwave Solutions. "But it signals that Beijing will match every single effort the United States targets against China — if the U.S. sanctions a Chinese company, they're going to sanction a U.S. company. If we impose export controls on technology, they're going to do export controls on technology. We have just now escalated to a whole new level of trade warfare that nobody was expecting."

The Trump administration says the U.S. port fees will help spark a renaissance for the U.S. shipbuilding industry and reduce what the Office of the U.S. Trade Representative says is a risky U.S. dependency on Chinese shippers.

Major ocean carriers have signaled they plan to absorb the new costs. But U.S. retailers, manufacturers and shipping experts warn that will likely be short-lived and that eventually they will have to pass the fees on to consumers. The higher costs will further strain the shipping industry, which transports more than 80 percent of global trade and is already grappling with the disruptive effects of Trump's sweeping tariffs.

Cargo imports to the U.S. carried by ships that are either Chinese-owned or operated by Chinese companies will face port fees of $50 per ton starting next week, with the fee set to increase by $30 per ton each year over the next three years. Non-Chinese operators of ships built in China will also face charges, according to the new policy. China's retaliatory port charges will also annually escalate to a maximum of $157 in 2028.