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The United States Trade Representative (“USTR”) has proposed several actions targeting vessels and operators in the maritime, logistics and shipbuilding sectors with ties to China. If these proposed actions are introduced, it will significantly affect industry stakeholders globally. This newsletter delves into the background and the proposed actions, focusing on the fees on services and restrictions to promote the transport of U.S. goods.
On 12 March 2024 five U.S. labor unions filed a petition under section 301 of the U.S. Trade Act of 1974 (as amended) in an effort to get the U.S. Government to adress the alleged: “unreasonable and discriminatory acts, policies, and practices of the People’s Republic of China to dominate the maritime, logistics, and shipbuilding sector that burden or restrict U.S. Commerce”.
The USTR – under the Biden Administration – followed up on the petition by initiating consultations and hearings during the spring of 2024.
The USTR’s investigation was finalized on 16 January 2025. In a extensive public report, and with a Notice of Determination, the USTR concluded that China’s acts, politicies and practices were in fact actionable as China targeted the martime, logistics and shipbulding sectors for dominance in a way that was found “unreasonable” and “burdens or restricts U.S. commerce”.
On 21 February 2025 – and now under the Trump Administration – the USTR announced its proposed actions under Section 301 of the Trade Act, which included (i) Fees on Services, (ii) Restrictions on services to promote the transport of U.S. goods on U.S. vessels and (iii) other actions.
Timeline of the proposed actions, including the next step of a public hearing on the proposed action points on 24 March 2025.
The proposed actions relating to the wide-ranging fees imposed as well as the requirements in order to promote U.S. focused transport are briefly described below. However, we note that the lack of shipbuilding capacity in the U.S. for large commercial vessels combined with the potential detrimental effect on U.S. exporters and importers makes it doubtful whether the actions will be implemented in the proposed form.
One part of the USTR’s proposal for actions seek to impose a variety of wide-ranging fees on shipping companies, operators and vessels with a chinese tie.
Althought the USTR has not proposed a complete and final fee-framework, they have suggested to impose the following fees on (i) Chinese vessel operators, (ii) operators with Chinese-built vessels and (iii) operators with prospective orders for Chinese vessels:
The regulatory and administrative framework for the proposed fees are not disclosed, and it is therefore uncertain what is meant by the term “Chinese Vessel Operators”.
The proposal also includes a seven year’s schedule outlining targeted thresholds (ranging from 1-15%) for how much of the international maritime transport of U.S. goods (such as capital goods, consumer goods, agricultural products, and chemical, petroleum, or gas products) which must be carried out by U.S. operators using U.S-flagged vessels. From the third year, a percentage of the vessels transporting U.S. products must also be U.S. built (i.e. in addition to being U.S. flagged and U.S. operated).
If the operator can prove that at least 20% of the U.S. products that the operator will transport by vessel during one calender year is exported on U.S.-built ships, the operator may be approved for export on non-U.S.-built vessels as well.
Finally, the proposed actions include an action to reduce or restrict the use of the Chinese National Transportation and Logistics Public Information Platform (LOGINK), such as limiting access to U.S. shipping data, or banning LOGINK’s software in U.S. ports.
The proposed actions have raised questions in the international shipping industry since they were published. As of now, the proposed actions set forth are not a legal framework and it is unclear how and to what extent the proposed actions will be implemented.
As an example of the uncertainty, it is nowhere in the USTR’s proposal specified how an “Operator” is to be understood, as a definition hereof is not included. Thus, the term “Operator” has neither beed defined by USTR in the report, the Notice of Determination nor the proposed actions. We have only been able to locate the a definition used by U.S. Maritime Administration – Department of Transportation, which can be found in exhibit 129 to the labor unions’ petition of 12 March 2024:
“Company responsible for the commercial decisions concerning the employment of a ship and therefore who decides how and where that asset is employed. The direct beneficiary of the profits from the operations of the ship, this company may also be responsible for purchasing decisions on bunkers and port services. A medium to long‐term time or bareboat charterer is considered to be the operator of the ship. Companies heading operator pools are Operators of the ships in the pool.”
Another example of uncertainty is the proposal that (i) operators with a fleet where 25% or more of the fleet is comprised of Chinese-built vessels and (ii) operators with orders or expected deliveries from Chinese shipyards are imposed with “additional fees”. Based on the current wording and the way the that additional fees are presented in the proposal, it is unclear whether these are actually additional fees or alternatives to the other proposed fees.
Furthermore, it is stated in Section 301 of the Trade Act that any actions taken althought they must be ”appropriate and feasible” can be imposed at the sole discretion of the American President.
There is therefore a large degree of uncertainty as to whether the proposed actions will be adopted in their current version – and to what extent – and whether the Trump Administration will impose other kinds of restrictive measures than those already included in the USTR’s proposed actions.
The affected sectors will need to await the next steps from the USTR and the public hearing on 24 March 2025 to learn more about what concrete actions will be adapted as legally binding by the U.S. administration.
At Gorrissen Federspiel we are following the developments closely.