The US Trade Representative’s office is reportedly expected to announce a new rule that would impose fees of up to $1.5 million per port call for ships built in China, and between $500,000 and $1 million for carriers that merely own or have on order a single China-made vessel.
“Ocean carriers have announced that to reduce the fees they will skip the smaller ports like Seattle, Oakland, Boston, Mobile, Baltimore, New Orleans, etc. Some carriers have said they’ll just move the capacity serving the U.S. to other trade lanes altogether,” Ryan Petersen, Founder and CEO of Flexport, said of the potential fallout.
Analysts predict job losses in these smaller ports and higher costs for both importers and exporters forced to reroute cargo through major hubs. Petersen foresees congestion at larger facilities, such as Los Angeles, Long Beach, Houston, and New York, reminiscent of the bottlenecks seen during the pandemic.
“The craziest part of the original proposal,” Petersen said, “is a requirement that within 7 years 15% of U.S. exports must travel on a ship that’s made in America and crewed by Americans.” He continued to argue that this is unworkable because the US currently has only 23 ships that meet those criteria, all devoted to domestic routes, and construction of new American-made container ships remains minimal.
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Although lawmakers backing the policy hope to spur domestic manufacturing, some economists believe the plan risks undermining US competitiveness. They also point out that rising tariffs on imported machinery and components already pose a challenge for American manufacturers.
“If we want the U.S. to be competitive in global manufacturing, we need world-class port infrastructure and logistics connectivity,” Petersen added.
The new rule is expected to be implemented on April 17.
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