On Tuesday, the US and China are set to impose additional port fees on ocean shipping companies.
This move will affect the transport of various goods, from holiday toys to crude oil, turning the high seas into a significant battleground in the trade war between the world’s two largest economies, Reuters said in a report.
China announced it has begun levying special charges on US-owned, operated, built, or flagged vessels, with an exemption for Chinese-built ships.
China outlined specific exemption provisions, including for empty ships entering Chinese shipyards for repair, in details released by state broadcaster CCTV on Tuesday.
China will collect additional port fees at the initial port of entry for a single voyage or for the first five voyages within a year. These fees will be collected annually, following a billing cycle that begins on April 17, according to the report.
The Biden administration previously investigated and concluded that China’s unfair policies and practices led to its dominance in the global maritime, logistics, and shipbuilding industries.
This finding paved the way for penalties that the Donald Trump administration announced earlier this year.
Retaliatory measures
These fees on China-linked ships are intended to loosen China’s control over the global maritime industry and strengthen US shipbuilding.
The US is set to implement new fees on October 14.
Analysts predict that China’s COSCO a container carrier, will bear the brunt of these charges, potentially facing nearly half of the estimated $3.2 billion cost in 2026 for that specific segment.
Last week, China announced retaliatory port fees on US-linked vessels, effective the same day.
According to Jefferies analyst Omar Nokta, this measure would impact 13% of the global crude tanker fleet and 11% of container ships.
“This tit-for-tat symmetry locks both economies into a spiral of maritime taxation that risks distorting global freight flows,” Athens-based Xclusiv Shipbrokers Inc said in a research note.
Global shipping industry braces for impact
A consultant based in Shanghai, who advises international businesses on trade with China, suggested that the new fees might not significantly disrupt the industry.
Any increased costs, the consultant added, would likely be reflected in higher prices, according to the Reuters report.
What are we going to do? Stop shipping? Trade is already pretty disrupted with the US, but companies are finding a way.
In response to China’s restrictions on critical mineral exports, Trump announced on Friday that he would impose new 100% tariffs on Chinese goods and implement export controls on “any and all critical software” by November 1.
Hours later, administration officials issued a warning: nations supporting the United Nations’ International Maritime Organization’s proposal to decrease greenhouse gas emissions from ocean shipping this week could face sanctions, port bans, or punitive vessel charges.
China has publicly endorsed the IMO plan.
Xclusiv Shipbrokers Inc added:
The weaponisation of both trade and environmental policy signals that shipping has moved from being a neutral conduit of global commerce to a direct instrument of statecraft.
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