The US Trade Representative issued its final assessment of port fees on Chinese operators and vessels on Thursday April 17, 2025. This decision follows the original recommendations made in February, targeting China’s dominance of the maritime sector.
The fees announced on Thursday represent significant changes from the original issuance, taking into account public comments and feedback from the two-day hearings that took place to discuss the initial proposal. Throughout that period, there was broad support for the US to address Chinese dominance, but much criticism about the actual steps being taken.
“The USTR is moving in the right direction with their revamped port fees, but they still have a long way to go to make them more equitable to USA-based importers,” says Rich Roche, Senior Vice President at Mohawk Global. “Ad valorum fees charged on the value of the goods would be more equitable. USTR might also consider consistency in the application of fees across all vessels calling USA ports instead of targeting Chinese owned or operated vessels that cost USA importers when the fess are passed on, instead of impacting the Chinese ship owners, operators, or other Chinese entities.”
The final Federal Register Notice can be found here. There are now four Annex under which a fee can be assessed. Below is a summary of revisions, along with the Annex and port fees that will go into effect.
Notable Revisions:
- Vessels are no longer charged “per port of call”, but rather once per voyage. This helps to address the concern that ocean carriers would skip smaller ports of call, in an attempt to reduce the additional overall cost.
- The fee can only be charged five times per year, per vessel. This is unlikely to impact US East Coast vessels – which call approximately five or six times per year. However, it could help spread the costs on US West Coast bound vessels, who are able to call more often.
- The fee is no longer applied to operators with a certain percentage of Chinese made vessels in their overall fleet. This alleviates concerns that a European shipping operator bringing a Taiwanese built vessel to the US, is still charged if they own a high percentage of Chinese made vessels, overall. This also includes new-build orders. This revision eliminates one of the three pillars of the original order.
- The fees no longer “stack”. There are four Annex with prerequisites for qualification. The fee will be applied to the highest of the applicable Annex, rather than potentially being charged across multiple Annex. This could reduce the top end cost.
- There is a 180 day pause before implementation, with fees beginning on October 14, 2025. This delay should allow carriers to adjust service strings and specific vessel utilization to minimize their impact. There were initial concerns that the fees would cause widespread vessel and service disruption while these changes were made. They can now be done more systemically.
- Relief has been provided for requirements on US exports needing to move on US flagged/built ships. While some restrictions do still apply relating to LNG Vessels, they do not start until 2028 and still allow US exports to mostly move under the best economic conditions. This lessens the concern over the lack of US vessel capacity to economically move US exports.
- There are no fees to be applied on US owned companies using China flagged vessels, on short-haul shipping (less than 2,000 nautical miles) or on vessels operating in the Great Lakes, addressing concerns from companies operating in those sectors who were seen as collateral damage of the initial fee schedule.
- Vessel owners/operators could get a remission of the fees with proof of US Shipbuilding orders, but the practicality of this is extremely limited and unlikely to be used much.
While these revisions are welcome, there are still some concerns that remain or have now come to light as a result of some of the changes:
- As the two China-owned vessel operators, OOCL and COSCO are disproportionately hit by the fees. Collectively, these two carriers move more containers from China to the US than any other carrier. There is no way to hit the biggest mover of cargo disproportionately with no general effect on the broader industry. Insulated carriers do not have the capacity to absorb this volume, and carriers such as Evergreen and CMA run in the alliance with OOCL and COSCO, so they must adjust in tandem.
- A new rule instituted states that any vessel sailing less than 2,000 nautical miles to the US is exempt from the fees. As we saw with vessels trying to skirt EU emissions rules, we could see carriers attempt to trans-ship cargo in nearby ports before calling the US, such as in Freeport, Bahamas or Kingston, Jamaica. This would be an unwelcome service disruption, especially on East Coast trade, inserting schedule disruption along with a high chance of congestion at these ports.
- Any vessel under 4,000 TEU is exempt from the fee. This may encourage ship operators to use smaller vessels especially on Trans-Atlantic trade, which would restrict capacity and possibly raise rates. It could also encourage “shuttle services” from a place like Kingston where Asia cargo is dumped, then “shuttled” to East Coast ports in small quantities, furthering transit time concerns and congestion issues.
- The fees could end up being higher, as they now target “Net Tonnage” rather than simply “per vessel”. While the previous iteration of the fees has caps, these new fees do not. This could mean that those subject to the fees could end up facing higher overall fees than before, creating a higher “pass along” charge to US importers and exporters.
- The fees scale up over time. This is an attempt to allow companies to make necessary changes to avoid or minimize the costs over time. However, this could also mean the original cost impact and service impact found to be minimal at first, could continue to get worse as the fees increase.
- Along with the fees, the USTR has announced targeting of additional tariffs on ship-to-shore cranes and other cargo handling equipment such as chassis and containers. With China as the main provider for the sector, slowdowns in production of chassis and containers specifically could have long-term impact on their supply.
The World Shipping Council which is a representative group for the major shipping lines, have published their summary objections to the proposals, as well.
Four Annex of Applicability & Fees:
Annex I: Service Fee on Chinese Vessel Operators and Vessel Owners of China
- As of 4/17/25: $0 per net ton of arriving vessel
- As of 10/14/25: $50 per net ton of arriving vessel
- As of 4/17/26: $80 per net ton of arriving vessel
- As of 4/17/27: $110 per net ton of arriving vessel
- As of 4/17/28: $140 per net ton of arriving vessel
Annex II: Service Fee on Vessel Operators of Chinese-Built Vessels
- As of 4/17/25: $0 per net ton of arriving vessel or per container discharged
- As of 10/14/25: $18 per net ton of arriving vessel or $120 per container discharged
- As of 4/17/26: $23 per net ton of arriving vessel or $153 per container discharged
- As of 4/17/27: $28 per net ton of arriving vessel or $195 per container discharged
- As of 4/17/28: $33 per net ton of arriving vessel or $250 per container discharged
Annex III: Service Fee on Vessel Operators of Foreign-Built Vehicle Carriers
- As of 4/17/25: $0 on the entering non-U.S. built vessel
- As of 10/14/25: $150 per Car Equivalent Unit Capacity of entering non-US built vessel
Annex IV: Restriction on Certain Marine Transport Services
- This section sets requirements on exports of LNG and overall exports on US Flagged vessels, the lists of which can be found in the Federal Register notice.
Overall, we expect the fees coming through to still have an impact on container traffic. The predicted price increases and capacity constraints should still occur, though to a smaller degree when compared to the original proposals. The escalating fees do mean that initial impacts may get worse over time.
However, the delayed implementation along with the more standardized approach to the fees should make the ultimate impact of them more transparent and allow an easing into the new normal which the original recommendation would not have allowed. We will continue to monitor developments related to these port fees and provide more information as it becomes available. If you have additional questions about how this may impact your business, reach out to your Mohawk Global Representative.
By Chris Lindstrand, Vice President of International Transportation