Trump’s Tariff Ship Has Sailed: The Chinese Ship Levy
Stephen Anderson

President Donald Trump is proposing an executive order to levy fines of up to $1.5 million per port call on Chinese-built ships arriving at US ports, effective in 2025. A majority of cargo ships globally in use were built in Chinese shipyards.

The order’s origin started with the Biden administration. Trump’s US Trade Representative’s press release of March 21, 2025 provides the proposed Chinese ship levy background:

Section 301(b) of the Trade Act of 1974, as amended (Trade Act), is designed to address unfair foreign practices affecting U.S. commerce. Section 301(b) may be used to respond to unreasonable, or discriminatory foreign government acts, policies, and practices that burden or restrict U.S. commerce. The Section 301 provisions of the Trade Act provide a domestic procedure through which interested persons may petition the U.S. Trade Representative to investigate a foreign government act, policy, or practice and take appropriate action.

On March 12, 2024, five national labor unions filed a petition requesting an investigation into the acts, policies, and practices of China targeting the maritime, logistics, and shipbuilding sectors for dominance. The five petitioner unions are:

• the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO CLC (“USW”);
• the International Association of Machinists and Aerospace Workers (“IAM”);
• the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO/CLC (“IBB”);
• the International Brotherhood of Electrical Workers (“IBEW”); and
• the Maritime Trades Department, AFL-CIO (“MTD”)....

USTR found China’s targeting for dominance unreasonable because it displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on the PRC, increasing risk and reducing supply chain resilience.

US federal officials do not agree with China’s government owning and subsidizing shipyards building cargo ships used in global commerce transport. This is a policy choice by China and it yields a lower cost for their cargo ship construction. The outcome is born by the Chinese government. The US government may not like how China operates its shipyards, but it’s none of our business on how they run their country.

BIMCO—a Dutch-based global shipping trade group—represents ship owners and operators in 130 countries including China and the US. They sent a response letter to the US Trade Representative (USTR) in March 2025, to this draft rule. One key quote from the letter, “Port fees are passed on in the supply chain so the costs would be passed on to the US importers of foreign goods and, ultimately, the US consumer.”

One unintended consequence is China imports US-mined coal from Wyoming’s Powder River Basin via US west coast ports. Many coal ships were built in Chinese shipyards. US coal has a sulfur content lower than Chinese-mined coal. When US coal is burned, it leads to lower sulfur dioxide emissions (air pollution) from Chinese coal-fired electric-generating stations:

Last month, Pennsylvania-based coal marketer Xcoal Energy & Resources CEO Ernie Thrasher told Reuters that vessel owners have already refused to provide offers for future U.S. coal shipments due to the proposed USTR fees. Thrasher estimates that implementing the punitive fees could cease exports of U.S. coal within 60 days, putting $130 billion worth of shipments at risk. Thrasher says the fees could add up to 35% to the cost of U.S. coal, making it uncompetitive on the global market.

The US coal mining industry is in decline in the 21st century, with US coal-fired electric-generating stations retired from federal regulations, higher cost of coal-sourced electricity, propaganda of the evils of coal-fired emissions contributing to global warming, etc. US coal exports were a bright spot, but it is being dimmed by this new US-sponsored Chinese ship levy.

“According to the American Petroleum Institute, the proposed fees could also make it harder for the U.S. to export oil, liquefied natural gas (LNG), and refined fuels.” The US exports on cargo ships approximately 3 million barrels of crude oil (crude) a day and roughly 10 billion cubic feet of LNG per day. Many ships calling on US ports to receive crude and LNG were built in Chinese shipyards. The new port levy unintended consequence is these ships will not call on US ports to avoid paying this new port levy. Prospering US energy exports will be diminished by this economic policy:

According to shipping association BIMCO, very few maritime operators are able to meet the requirement by the Trump administration that at least 20% of U.S. exports are carried on U.S. built, U.S flagged vessels, something likely to hit U.S. energy exports “...specifically liquid natural gas (LNG) as no US built, US flagged LNG carriers are in operation nor on order,” said BIMCO.

The US is producing and exporting record volumes of crude and LNG to nations around the world and this blessing is being muzzled by this moronic move. The informal definition of moron as a noun from dictionary.com is, “a person who is notably stupid or lacking in good judgment.”

The complex effort to build and retrofit existing US shipyards to construct cargo ships, crude tankers, and LNG vessels requires money, permitting, personnel, pipefitters, welders, ship designers, steel plate supply, special steel to handle cryogenic LNG cargoes, supply chain, etc.

US farmers will be caught in the Chinese ship fee fracas:

Last month, three U.S. grain export traders told Reuters that the inability to secure ocean freight transportation was already restricting their ability to sell bulk U.S. agricultural products like corn, soybeans and wheat. According to the U.S. Census Bureau Trade data, the United States exported (see page 28) more than $64 billion in bulk crops, vegetable oils and bulk animal feeds in 2024.

This could lead to food rotting at the port thanks to poor planning by the federal policy purveyors.

The Trump Chinese ship levy proposal is policy tunnel vision where, “...US import/export is about 12% of global seaborne trade so the consequences of re-organising maritime trade will have a much bigger impact on US import/export than on trade in the rest of the world.”

Chinese-built cargo ships will avoid US ports to not be subject to the proposed levy. This is another federal economic intervention emasculating US exports for no substantive reason.

 

Stephen is a graduate of The University of Texas at Austin and lives in Texas. He retired from state government service and has time to help family and friends read about economic history.

 

 

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