BEIJING/LOS ANGELES--The U.S. and China on Tuesday began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil, making the high seas a key front in the trade war between the world's two largest economies.
A return to an all-out trade war appeared imminent last week, after China announced a major expansion of its rare earths export controls and President Donald Trump threatened to raise tariffs on Chinese goods to triple digits. But after the weekend, both sides sought to reassure traders and investors, highlighting cooperation between their negotiating teams and the possibility they could find a way forward.
China said it had started to collect the special charges on U.S.-owned, operated, built or flagged vessels but clarified that Chinese-built ships would be exempted from the levies. In details published by state broadcaster CCTV, China spelled out specific provisions on exemptions, which also include empty ships entering Chinese shipyards for repair.
Similar to the U.S. plan, the new China-imposed fees would be collected at the first port of entry on a single voyage or for the first five voyages within a year. "This tit-for-tat symmetry locks both economies into a spiral of maritime taxation that risks distorting global freight flows," Athens-based Xclusiv Shipbrokers said in a research note.
Early this year, the Trump administration announced plans to levy the fees on China-linked ships to loosen the country's grip on the global maritime industry and bolster U.S. shipbuilding. An investigation during the former Biden administration concluded that China uses unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, clearing the way for those penalties.
China hit back last week, saying it would impose its own port fees on U.S.-linked vessels from the same day the U.S. fees took effect. "We are in the hectic stage of the disruption where everyone is quietly trying to improvise workarounds, with varying degrees of success," said independent dry bulk shipping analyst Ed Finley-Richardson.
He said he has heard reports of U.S. shipowners with non-Chinese vessels trying to sell their cargoes to other countries while en route so the vessels can divert. Reuters was not immediately able to confirm.
Analysts expect China-owned container carrier COSCO to be most affected by the U.S. fees, shouldering nearly half of that segment's expected $3.2 billion cost from those fees in 2026.
Major container lines, including Maersk, Hapag-Lloyd and CMA CGM, slashed their exposure by switching China-linked ships out of their U.S. shipping lanes. Trade officials there reduced fees from initially proposed levels and exempted a broad swath of vessels after heavy pushback from the agriculture, energy and U.S. shipping industries.
USTR did not immediately respond to a request for comment.China's commerce ministry on Tuesday said, "If the U.S. chooses confrontation, China will see it through to the end; if it chooses dialogue, China's door remains open."
In a related move, Beijing also imposed sanctions on Tuesday against five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean which it said had "assisted and supported" a U.S. probe into Chinese trade practices. Hanwha, one of the world's largest shipbuilders, owns Philly Shipyard in the U.S. and has won contracts to repair and overhaul U.S. Navy ships. Its entities also will build a U.S.-flagged LNG carrier.
Hanwha said it is aware of the announcement and is closely monitoring the potential business impact, and that it will continue to provide services to its customers, "including through our investments in the U.S. maritime industry and via Hanwha Philly Shipyard."
