On 17 April 2025, the United States Trade Representative (USTR) announced significant actions in its year-long Section 301 Investigation regarding China's alleged targeting of the maritime, logistics and shipbuilding sectors for dominance. The related Notice of Action and Proposed Action, published on 17 April 2025, outlines two primary categories of proposed actions: (1) fees on maritime transport services and (2) additional duties on certain cargo-handling equipment.

Background

The USTR initiated a Section 301 investigation in April 2024 in response to concerns regarding China's perceived practices aimed at dominating the maritime, logistics and shipbuilding sectors. This investigation was prompted by a petition filed on 12 March 2024 that underscored China's perceived aggressive targeting of these industries, raising concerns about their impact on US commerce and national security. In alignment with these actions, President Trump issued Executive Order 14269 on 9 April 2025, titled "Restoring America's Maritime Dominance." This order directs the USTR to take necessary measures to bolster US shipbuilding and maritime capabilities, emphasizing the need to address vulnerabilities in the supply chain and enhance the competitiveness of US industries against foreign dominance. Following extensive consultations and a public hearing, the USTR has determined that decisive action is necessary to counter perceived unreasonable practices by China and strengthen US competitiveness in these sectors.

Notice of Action

The 17 April Notice of Action regarding fees on maritime transport services includes Phase 1 actions that will take effect after 180 days (effective 14 October 2025). Fees will be imposed on vessel owners and operators from China based on net tonnage per US voyage. The fee will start at US$50 per net ton (NT) and will increase by US$30 NT per year over the following three years. Operators of Chinese-built ships will face fees based on net tonnage or containers, starting at US$18 NT or US$120 per container, respectively. These fees will also increase incrementally, with the container fee rising to US$154 in the second year. Fees are assessed per US voyage, not per port call, and will be imposed on a given ship no more than five times per year. Importantly, the fees are not cumulative; only one fee will be assessed per US voyage. In certain scenarios, upon proof of an order for a US-built vessel, fees or restrictions on an equivalent non-US-built vessel may be suspended for up to three years.

Additionally, the Notice of Action includes provisions related to liquefied natural gas (LNG) exports. After three years, restrictions will be imposed requiring a certain percentage of LNG exports to be transported on US-built vessels. These restrictions will increase incrementally over a 22-year period, promoting the use of US maritime resources for critical energy exports and enhancing national security by reducing reliance on foreign shipping for essential energy supplies. The potential cost implications for LNG exporters could be significant, as compliance with these restrictions may necessitate investments in US-built vessels, affecting overall shipping costs and logistics.

Notice of proposed action

The proposed action on additional duties aims to impose tariffs on certain ship-to-shore cranes and other cargo-handling equipment from China. This action is designed to counter China's dominance in the production of critical maritime equipment. The proposed action includes novel origin rules, whereby any specified component sourced from China or any manufacturing operation owned by a Chinese entity will confer Chinese origin on the entire product. This broad definition seeks to close loopholes that could allow Chinese products to circumvent tariffs. The proposed action also encompasses intermodal containers, including those used for liquids, which are typically classified as Instruments of International Traffic (IIT). Businesses should monitor for any contrary positions regarding the IIT status of Chinese containers, as this could affect the applicability of tariffs.

The USTR requests written comments on the proposed actions, during the comment period, 17 April 2025 through 19 May 2025. Requests to appear at the public hearing must be submitted by 8 May 2025. The hearing will take place at the US International Trade Commission in Washington, DC.

Comments should be submitted electronically via the USTR Comments Portal.

Actions for businesses to consider

Businesses involved in maritime transport or utilizing equipment affected by these proposals should carefully review the details and consider participating in the public comment process to express their views on the potential impacts of the proposals. Reviewing import data to understand potential impact and liabilities will be part of that process. Staying informed on the evolving regulatory landscape will be crucial for compliance and strategic planning.