USTR Final Action on Port Entry Fees for Chinese-Operated, -Owned, and -Built Vessels; Non-U.S. Built Vehicle Carriers

Description

On April 17, 2025, the USTR announced its final action to restore American shipbuilding and address China's unreasonable acts, policies, and practices to dominate the maritime, logistics, and shipbuilding sectors. The action follows the USTR’s investigation, commenced a year earlier pursuant to Section 301 of the Trade Act of 1974, as amended, which determined that China has been targeting the maritime, logistics and shipbuilding sectors for dominance through policies that are unreasonable and burden or restrict U.S. commerce. This determination set the stage for the USTR’s April 17 action to address these acts, policies and practices pursuant to Section 304(c) of Trade Act. The final action follows the publication of the USTR’s proposed action on February 21, 2025, and its consideration of extensive comments from the maritime, logistics and shipbuilding industries.

According to the USTR’s press release announcing the final action, the final action will, with specified exceptions, impose service fees on Chinese operators of vessels calling on U.S. ports, the operators of Chinese-owned and -built vessels calling on U.S. ports, and the operators of foreign-built vehicle carrier vessels calling on U.S. ports. The final action will also require that an increasing percentage of U.S. liquified natural gas (LNG) exported by vessel be exported onboard vessels that are U.S.-built, U.S.-flagged and U.S.-operated.

The USTR’s action is likely to have a significant effect on U.S. international shipping. More than half of all worldwide newbuild vessel tonnage is now built in Chinese shipyards and a significant number of vessels are Chinese-operated or -owned, including through sale-leaseback financing arrangements with Chinese leasing companies. The USTR action is likely to have long-lasting and significant effects on how shipowners, charterers and operators manage their fleets and how freight forwarders and shippers conduct their businesses. The United States is also the world’s largest exporter of LNG and the USTR’s final action is likely to have a significant impact on both U.S. shipbuilding and the U.S. maritime export of LNG in the years to come.

Listen as this experienced panel of transportation and trade lawyers discusses the USTR's actions and how parties can protect themselves now and in the future.