Overview
On April 17, 2025, the Office of the US Trade Representative (USTR) issued its Final Notice of action under Section 301 of the Trade Act of 1974 (Section 301), in connection with its Investigation of China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance. This action concludes the year-long investigation initiated by the USTR following a petition filed by five US labor unions on March 12, 2024. A recent notice, issued on June 12, 2025, introduces proposed modifications to the actions taken on April 17.
According to the agency’s Final Notice and accompanying press release, the United States will begin charging fees on Chinese-owned, -operated, and -built vessels arriving in US ports starting October 14, 2025, or 180 days after the date of the determination. The structure and timing of these fees, and the reaction from the world shipping community, are summarized below.
- Phased fee on Chinese vessel operators and vessel owners.
This fee, based on the net tonnage of the vessel, is assessed against any vessel with a Chinese operator, or owned by an entity of China. As defined by Annex I, a vessel owner or operator of China includes any entity whose country of citizenship is identified as People’s Republic of China (PRC), Hong Kong, or Macau, or is owned by, controlled by, or subject to the jurisdiction or direction of an entity based in PRC, Hong Kong, or Macau.
If a vessel makes multiple US entries before transiting to a foreign destination, this fee is assessed per rotation or string of US port calls.
The fee will be set at $0 for the first 180 days, will then be set at $50/NT, and will increase incrementally at a rate of $30 per ton per year over the next three years.
- Phased fee on Chinese-built vessels.
This fee is based on the higher of (i) a fee based on the net tonnage of the vessel, or (ii) a fee assessed per container. The fee will be set at $0 for the first 180 days and rise incrementally over the next three years, as described in Annex II.
If a vessel makes multiple US entries before transiting to a foreign destination, this fee is assessed per rotation or string of US port calls.
Certain Chinese-built vessels are not subject to the fee, including: certain vessels enrolled in certain US Maritime Administration programs (e.g., the Maritime Security Program and Tanker Security Program); vessels arriving empty or in ballast; vessels below certain size or capacity thresholds; vessels engaged in short sea shipping (i.e., voyages of less than 2,000 nautical miles from certain US ports); certain US-owned companies' vessels; and certain specialized export vessels. A vessel operator is eligible for a fee remission for up to three years if it orders and takes delivery of a US-built vessel of equivalent size.
- Phased fee on vessel operators of foreign vehicle carriers.
The April notice imposed fees based on the Car Equivalent Unit (CEU) capacity of any foreign-built vehicle carrier, as set out in Annex III.
The fee was to be set at $0 for 180 days and will at $150 per Car Equivalent Unit (CEU) capacity of the entering non-US-built vessel.The June 12 notice proposes to replace the CEU metric with net tonnage for those vehicle-carrier vessels enrolled in the Maritime Security Program (MSP), which must be US-registered vessels to qualify. USTR has not proposed a specific dollar amount and is considering comments on an appropriate rate and phase-in period. USTR justified this proposed change from a CEU-based to a net tonnage fee, adducing that it is easier to administer and may, therefore, reduce fee evasion. All other non-MSP carriers would default to the CEU fee.
An operator could receive a fee remission for up to three years if it orders and takes delivery of a US-built vessel of equivalent or greater capacity within that time period.
A vessel operator will be eligible for a fee remission for three years if it orders and takes delivery of a US-built vessel of at least equivalent size.
Note that under the April notice, the three options for phased fees are not cumulative, so a party is subject to one of the three fee structures above, but not all. In other words, if a Chinese vessel operator uses Chinese-built vessels, it would likely be subject to fees under Annex I (which has a requirement based on the nationality of the operator/vessel and is thus more specific) rather than Annex II (which has no nationality requirement and seems to capture any vessel operator using a Chinese vessel). Certain specifics regarding the fees proposed in the Final Action, and certain definitions of key terms in the Final Notice, remain uncertain.
After three years, pursuant to the April notice USTR will impose a restriction requiring the use of US vessels for the maritime transport of a certain percentage of LNG exports, as set out in Annex IV. Non-compliance may result in the suspension of LNG export licenses. However, in the June 16 notice, the USTR proposed eliminating this penalty if the required minimum percentage of LNG was not ultimately transported in US-built vessels in a given year. In this context, USTR is also evaluating the possibility of allocating data reporting responsibilities for LNG exports to vessel owners instead of terminal operators.
Finally, USTR is considering comments on proposed tariffs on ship-to-shore cranes and other cargo handling equipment, consistent with the President’s April 9, 2025 Executive Order, "Restoring America's Maritime Dominance." After inviting public comments and holding a public hearing, USTR is still to announce a final decision.
