As of the publication of this piece, China has declared its intention to introduce port fees on U.S.-owned vessels calling at Chinese ports as of October 14, 2023. This decision comes as a direct response to the United States’ plan. They plan to charge the same types of fees to Chinese ships that come into U.S. waters. China’s Ministry of Transport cast the charges in news dispatches as “countermeasures” in retaliation for what it considers “wrongful” U.S. practices.
The newly implemented fees will apply to each and every vessel that has substantial connections to the U.S., whether through its ownership, operation, flag, or place of construction. This wide scope represents a powerful effort by China to intimidate American shipping interests. The per ship fee will change dramatically depending on the size of the ships. Watch for these to go up every year through 2028.
According to the Ministry of Transport, this change is meant to safeguard China’s shipping industry. They criticize the U.S. government for implementing what they decry as “discriminatory” policies.
“The U.S. port fees will severely damage the legitimate interests of China’s shipping industry.” – China’s Ministry of Transport
China’s announcement coincides with a very important time. It coincides with the U.S. implementing port fees on Chinese ships, or $50 per net ton each way for entering the U.S. This figure will rise by $30 per net ton annually through 2028. In the alternative, Chinese shipping companies will be subject to an increasingly burdensome fee schedule.
Kun Cao, the deputy chief executive at consulting firm Reddal, called the impact of this move “huge.” He said that China’s fees go far beyond a symbolic action. The fees are meant to apply only to those vessels with the strongest U.S. ties, he pointed out. Moreover, he pointed out, these fees go up based on the size of the ships.
“It explicitly targets any ship with meaningful U.S. links — ownership, operation, flag, or build — and scales steeply with ship size.” – Kun Cao
As per China’s new regulations, each vessel will only have up to five voyages per year charged. By 2028, the fees would increase to an incredible 1,120 yuan, or over $157 per net ton. This increase is indicative of a hawkish posture amidst the continuing trade war between the two countries.
As it stands today, the U.S. has just a 0.1% share of the global commercial shipbuilding market. This lack of planning creates a rocky road going forward. Without a doubt this fact calls into question the long-term sustainability and the economic impact of these kinds of retaliatory measures on each country’s shipping industrial complex.
