U.S. Grain and Feed Industry Opposes Proposed Export Penalties

In comments submitted today to the U.S. Trade Representative, the National Grain and Feed Association (NGFA) opposed a government proposal to levy steep fines and restrictions on exporters that use Chinese-made ships. It encouraged the USTR to seek alternative methods to boost U.S. shipbuilding.

“Though well intentioned, this proposal threatens to impose significant costs on U.S. grain and oilseed exporters and erode America’s competitiveness in the international market,” explained NGFA President and CEO Mike Seyfert.

The industry’s comments, which were filed jointly with the North American Export Grain Association (NAEGA) and the National Oilseed Processors Association (NOPA), were in response to a USTR Section 301 investigation into China’s dominance over global shipping and shipbuilding.

Proposed penalties include fines of up to $1.5 million for each Chinese-made ship that enters a U.S. port, up to $1 million per port call for Chinese operators, and up to $1 million for operators with orders from Chinese shipyards. The USTR’s plan would also set minimum amounts that carriers must export on U.S.-built, U.S.-flagged vessels.

“If enacted, this proposal would effectively eliminate half of the global bulk fleet that we need to export almost one-third of grains and oilseeds that are produced in America,” Seyfert explained. “That puts U.S. agriculture at a considerable competitive disadvantage in global markets. We are already seeing disruptions in the marketplace since the proposal was put forward, including lost sales and difficulty contracting ships.”

There are approximately 21,000 vessels in the world’s bulk shipping fleet, nearly 50 percent of which were made in China. Only five ships currently operating in the global fleet were built in America, or 0.2 percent.

Container vessels, which were used to export about $9 billion of grain and oilseeds in 2024, are also important to agricultural shippers and would be severely affected by the proposal, Seyfert said.

NGFA is asking the administration to consider other ways to promote the U.S. maritime industry, such as shipbuilding grants, tax credits, and reduced regulations. However, if the USTR moves forward with proposed penalties, NGFA wants agricultural commodities exempted.

“Without an exemption we could see a significant drop in corn, soybean, and wheat exports,” Seyfert concluded. “That jeopardizes the $65 billion trade surplus America enjoys on U.S. grains and oilseeds and hurts all of U.S. agriculture, from the exporters to the farmers.”