Vessel Fees, Country-by-Country Reciprocal Tariffs, Copper being Reviewed

We want to communicate a number of different news items that have come out this week:

United States Trade Representative Fee Recommendation for Chinese-Built Ships Calling at US Ports

An investigation started in 2024 by the office of the United States Trade Representative (USTR) has concluded?China’s state-backed shipbuilding industry?unfairly dominates the global maritime sector, harming US economic interests, and has proposed levying a fee of up to US$1.5 million per Chinese-built ship per US port call, regardless of the ship's flag or operator.

The proposal outlines layers of tariffs aimed at limiting the use of Chinese-built ships on US trade routes. Under the plan, ships owned by Chinese shipping companies would be required to pay up to $1 million per port call, or $1,000 per net ton of vessel capacity.? The most aggressive tariffs target ships built in China?even if they are operated by non-Chinese companies. These vessels would be subject to fees of up to $1.5 million per US port call, with the actual charge based on how many other Chinese-built ships the carrier operates:

• Carriers with at least 50% of their fleet built in China would be required to pay the maximum $1 million per call
• Carriers in the 25%-49% range would be charged up to $750,000 per call
• Carriers with less than 25% of their fleet built in China would still be subject to fees of up to $500,000 per port visit
• Additionally, the USTR is proposing penalties for shipping lines with a large number of future Chinese ship orders. Companies that have 50% or more of their upcoming vessel deliveries coming from Chinese yards could face an extra $500k - $1 million per call for those ships.

In contrast to these penalties, the USTR is recommending offering a financial incentive for US-built vessels:? shipping lines that operate vessels constructed in the United States would receive a $1 million refund per call when providing international transport services. This is part of a broader strategy to revive the US shipbuilding industry.

Many of the world’s largest shipping lines operate vessels built in China and could be forced to absorb new fees or pass them down to customers in the form of higher shipping rates if the fees are enacted.? A $1.5 million fee on a fully loaded 14,000 TEU Chinese-built containerships would amount to an extra $107 per TEU.

According to industry analysts at Linerlytica, at least 225 of the 1,045 ships currently deployed on US trade routes were built in China. In contrast, only 10 ships operating in these lanes were built in the United States.

If you would like to submit comments back to the USTR, you can do so here.

Request for Comments to Assist in Reviewing and Identifying Unfair Trade Practices - Feedback for the Country-by-Country Retaliatory Tariff Discussion

As part of the country-by-country trade discussion currently underway, the USTR is inviting public comments to aid in its process of reviewing and identifying any unfair trade practices by other countries.? Any feedback you submit will assist the USTR in recommending appropriate actions to remedy such practices to the President in pursuit of reciprocal trade relations.

We believe countries with a big disparity on trade with the US will be a primary focus of possible reciprocal tariffs.? The countries with the biggest trade disparities are China, Mexico, Canada, Vietnam, and Germany.? China, Canada, and Mexico are already countries of interest, expect the others to follow

The commentary period is open until March 11th, 2025, and comments can be submitted?here.

Copper Imports and Applicable Duties being Reviewed

An executive order issued last night by the President initiates an investigation under Section 232 of the Trade Expansion Act to determine the effects on national security of imports of copper in all forms.? The investigation has been given 270 days to conclude although it may not need that long and any recommendations for actions or changes to duties could come sooner.?

We will soon communicate our next webinar, planned for early March, to review the executive orders and proposed actions aimed at steel, aluminum, and copper imports.? We're confirming the subject matter expert(s) who'll join us in order to give you the latest status and opinion on this topic.? If you are an importer or exporter and want to receive our registration email in the coming days, please share your information with us here.