Trump moves to levy Chinese vessels in shipping shakeup

[NEW YORK] The Trump administration took steps to impose levies on Chinese vessels docking at US ports, threatening to shake up global shipping routes and escalate the trade war between the world’s two biggest economies.

Under a plan put forward by the US Trade Representative, all Chinese-built and -owned ships docking in the US would be subject to a fee based on the volume of goods carried. The proposal follows a months-long investigation ordered by Trump administration into whether Chinese shipbuilding threatens US national security.

The so-called 301 petition ordered the fee to go into effect in six months, with another phase restricting foreign-built liquefied natural gas (LNG) vessels to begin in three years. Funds from the docking fees would be used to revitalise the US’ waning shipbuilding industry, which long ago pivoted from building commercial ships to focusing on naval contracts.

Trump has long argued that China’s dominant role in the maritime industry has made the US overly dependent on the Asian nation, echoing the concerns of some shipbuilders. But US importers who rely on Chinese vessels to move everything from crude oil to retail goods see the docking fees as a de-facto tariff that would compound the already dizzying slate of duties Trump has imposed on global imports.

Opponents of the plan said in a March hearing that the move would raise prices for consumers, disrupt trade and threaten US ports. Shippers also point out that China’s dominant position in shipping, built in the past two decades, would be difficult to overcome with the fee alone.

During the first phase, Chinese vessel owners and operators would be charged a fee per net tonne. Container ships and those carrying cars would be subject to separate charges.

A second phase beginning in three years would limit LNG shipments on foreign vessels, with restrictions increasing incrementally over 22 years. The US is the world’s biggest exporter of LNG. BLOOMBERG