US Imposes Slightly Eased Port Fees on Chinese Ships

By Ryan Hanrahan

Agri-Pulse’s Oliver Ward reported this past week that “starting in October, the U.S. will impose port fees on Chinese-made ships and Chinese operators based on cargo volumes, the Office of the U.S. Trade Representative said on Thursday. But ag exporters will see some relief as the measures will not apply to ships that arrive empty to transport U.S. commodities or to those on shorter routes.”

“The measures, USTR argues, will ‘disincentivize the use of Chinese shipping and Chinese-built ships, thereby providing leverage on China to change its acts, policies, and practices, and send a critically needed demand signal for U.S.-built ships,'” Ward reported. “The fees will be applied per U.S. voyage, the fact sheet says, and not at each U.S. port call, as had been initially proposed. The fees will also only be issued up to five times per year on any given ship.”

“Chinese-built ships on shipping routes to the U.S. from locations less than 2,000 nautical miles away, including from ports in the Great Lakes or Caribbean regions, will also be exempt, as will ships arriving to the U.S. from overseas U.S. territories,” Ward reported. “Agriculture producers had warned that the fees could impose particularly steep costs for bulk commodity exporters, given Chinese-made vessels make up more than half of all port calls from dry bulk carriers. But USTR provided some relief in the final measures by exempting Chinese-built ships that arrive to the U.S. empty to export bulk commodities.”

What are the Fees?

Reuters’ Jonathan Saul, Lisa Baertlein, David Lawder and Andrea Shalal reported that “instead of a flat individual fee on large vessels, the USTR instead opted to levy fees based on net tonnage or each container unloaded, as was called for by operators of small ships and transporters of heavy commodities such as iron ore.”

“From October 14, Chinese-built and owned ships will be charged $50 a net ton, a rate that will increase by $30 a year over the next three years,” Saul, Baertlein, Lawder and Shalal reported. “That will apply if the fee is higher than an alternative calculation method that charges $120 for each container discharged, rising to $250 after three years. Chinese-built ships owned by non-Chinese firms will be charged $18 a net ton, with annual fee increases of $5 over the same period.”

“It was not immediately clear how high the maximum fees would run for large container vessels, but the new rules give non-Chinese shipping companies a clear edge over operators such as China’s COSCO,” Saul, Baertlein, Lawder and Shalal reported. “The notice comes on the one-year anniversary of the launch of the USTR’s investigation into China’s maritime activities.”

Bloomberg’s Joe Deaux, Ruth Liao, and Weilun Soon reported that “ship operators can avoid the fees for up to three years if they can show that they’ve ordered a new US-built vessel.”

Ward reported that “some U.S. ag groups met Thursday’s announcement with a sigh of relief, noting that the uncertainty around what measures were coming had prompted overseas customers to delay purchases. U.S. Wheat Associates and the National Association of Wheat Growers thanked ‘USTR for considering concerns and feedback from the agricultural community,’ they said in a statement.”

“‘This move means a lot to farmers and customers around the world,’ USW Chairman Clark Hamilton, said,” according to Ward’s reporting. “‘We want to thank them for their efforts to balance the need for action against these Chinese maritime practices with the potential for harm to our export competitiveness.'”

China Slams the New Fees

Deaux, Liao and Soon reported that “Chinese Foreign Ministry spokesman Lin Jian slammed the actions at a daily press briefing in Beijing on Friday, saying they will hurt US consumers and businesses in addition to disrupting global supply chains, while also failing to revitalize the US shipbuilding industry. ‘Measures such as imposing port fees and levying tariffs on cargo-handling facilities hurts the US itself as well as others,’ Lin said.”

In addition, Reuters reported that “China’s shipbuilders on Saturday blasted as ‘short-sighted’ U.S. port fees announced by President Donald Trump’s administration on China-linked ships, a measure aimed at the nation’s shipbuilding industry.”

“The China Association of the National Shipbuilding Industry expressed ‘extreme indignation and resolute opposition’ to the U.S measures, joining protests from the government and country’s shipowners,” Reuters reported. “‘The decline of the U.S. shipbuilding industry is the result of its protectionism and has nothing to do with China,’ the shipbuilders said in a statement.”

“It warned the U.S. restrictions would disrupt the global maritime system, lead to soaring shipping costs, further push up U.S. inflation and harm the interest of the U.S. people,” Reuters reported.