US exporters are confronted with the prospect of their costs doubling if the Trump administration goes ahead with its plan to levy a $1.5 million fee per port entry for vessels built in China.
Following an investigation that found China's maritime supply chain received improper state support, US Trade Representative (USTR) Jamieson Greer put forward the proposal for fees on China - built ships calling at US ports, regardless of the flag they sail under or the nationality of the operator.
Joe Kramek, CEO of the World Shipping Council, cautioned: "The USTR's proposed port fees could add $600 - $800 to the cost of each container - which would double the cost of US exports. Container vessels serving the US typically call at three to four US ports on each trip."
He stated that the fees would "add millions in costs to each voyage, leading to fewer US port calls, especially to small and medium - sized ports."
He also added: "Policymakers must reconsider these harmful proposals and look for alternative solutions that support American industries."
The proposals also include a $1 million per port entry fee for vessels belonging to an operator that has a Chinese - built vessel in its fleet or order book, no matter where the calling vessel was built.
However, contrary to its intention, the WCS said this would not "discourage current shipbuilding practices."
Instead, it warned that 98% of the ships calling at US ports could be affected, and with container fees increasing by $600 - $800 per movement, it would raise the cost of goods for US consumers by $30 billion a year.
Noting that China builds half of the world's container fleet, Ramon Fernandez, CFO of CMA CGM, said the USTR's move "would have a significant impact" on all carriers.
And Mr. Fernandez said he had no idea whether the vessel - sharing agreement CMA CGM has with carriers, the Ocean Alliance (which also includes China's Cosco), would be subject to potential repercussions from the new US administration's changing China policy.
While Mr. Trump's government will decide whether to proceed with the proposed levies, the USTR investigation was launched last April under his predecessor, Joe Biden.
