Notice of Proposed Action - Section 301 Investigation into China’s Targeting of Maritime and Shipbuilding Sectors
On March 12, 2024, five U.S. labor unions filed a Section 301 petition alleging that China’s industrial policies unfairly target dominance in maritime, logistics, and shipbuilding sectors. The U.S. Trade Representative (USTR), under the Biden Administration, initiated the investigation on April 17, 2024.
Throughout the course of its investigation, USTR received ~600 public comments and held hearings. Key concerns included economic impact, WTO compliance, and constitutional issues. USTR adjusted fee structures to mitigate adverse effects but defended the legality and necessity of actions under Section 301 authority.
The Trump Administration continued the investigation and has concluded that China’s state-led strategies create unfair competition, restrict U.S. commerce, and pose economic security risks. Specifically, the investigation finds that China's aggressive industrial planning has led to dominant global market shares in shipbuilding, shipping containers, chassis, and ship-to-shore cranes.
Determination of Action
On January 16, 2025, USTR determined China’s practices are unreasonable and actionable under Section 301. The USTR outlined a series of responsive actions, including (1) fees on maritime transport services, (2) restrictions on LNG exports to promote U.S.-built and U.S.-flagged vessels, and (3) tariffs on ship-to-shore cranes and cargo handling equipment linked to China.
A summary of the action includes:
1. Fees on Maritime Transport Services
Phased Fees on Chinese Vessel Operators and Owners:
A fee will be imposed on any vessel operated by a Chinese company or owned by a Chinese entity, based on the vessel’s net tonnage.
Initial Fee: $0 for the first 180 days.
After 180 Days: $50 per Net Tonnage (NT), increasing incrementally over three years.
The fee applies per "rotation" or series of U.S. port calls before returning to a foreign destination.
Phased Fee on Chinese-Built Vessels:
This fee is calculated based on the higher of either:
Net tonnage of the vessel, or
Per container basis:
Starts at $0 for the first 180 days, then increases over three years as detailed in Annex II.
Phased Fee on Foreign-Built Vehicle Carriers:
A fee applies to non-U.S.-built vehicle carriers, based on Car Equivalent Unit (CEU) capacity.
Initial Fee: $0 for 180 days.
After 180 Days: $150 per CEU.
Fee remission available for operators who order and take delivery of U.S.-built vessels within three years.
2. Restrictions on LNG Exports to Promote U.S.-built and U.S.-flagged Vessels
After a three-year transition period, USTR will mandate that a defined percentage of U.S. LNG exports be transported using U.S.-built vessels, as detailed in Annex IV. Operators can obtain a temporary three-year license to continue operations with non-compliant vessels if they commit to ordering and taking delivery of a U.S.-built LNG vessel of equal or greater capacity within that timeframe. USTR will coordinate with the Department of Energy and other relevant agencies to issue guidance and technical details on implementing this restriction.
3. Tariffs on Ship-to-Shore Cranes and Cargo Handling Equipment Linked to China.
In line with Executive Order 14269, “Restoring America’s Maritime Dominance,” the U.S. Trade Representative proposes additional duties on ship-to-shore (STS) cranes, Chinese containers, and certain chassis. These actions target China’s cargo handling equipment and will apply to specified tariff classifications, including headings 8609.00.00, 8716.39.0090, 8716.90.30, and 8716.90.50, as directed by the Executive Order.
Again, these actions are explained further under Annexes I-IV, detailing phased fees and operational restrictions.
Proposed Action
In alignment with Executive Order 14269, USTR proposed:
Additional tariffs on Chinese containers, chassis, parts, and STS cranes.
Tariffs range from 20% to 100% depending on the product category.
Promotion of U.S. shipbuilding through fee remissions and operational incentives tied to U.S.-built vessel procurement.
Additional Review: LOGINK and Digital Platforms
USTR is exploring further actions to mitigate risks from China's LOGINK platform (a digital logistics data system), including potential bans or restrictions on its use in U.S. ports.
Public Participation Process
Timeline for stakeholders:
May 8, 2025: Deadline to request hearing participation.
May 19, 2025: Deadline for written comments.
Post-hearing rebuttals due seven days after the hearing concludes.
Submissions can be made via USTR’s electronic portal, with protections available for Business Confidential Information. Please reach out to Constitution Partners for assistance on submitting public comment in response to this action.
Annexes Overview
Please review each individual annex carefully. The fees and requirements are assessed in the following order:
A vessel that is specially designed for the international maritime transport of liquified natural gas (LNG), is subject to Annex IV. A vessel subject to Annex IV is not subject to the fees in Annexes I, II, or III.
A vessel properly identified as a “Vehicle Carrier” on U.S. Customs and Border Protection Form 1300, or its electronic equivalent, will be subject to Annex III.
A vessel that meets the conditions of Annex I, e.g., a vessel operated by a Chinese entity or owned by a Chinese entity, will be subject to the fee imposed under Annex I.
A vessel may be subject to Annex II when Annex I and Annex III do not apply.
Below is a high-level summary:
Annex I (Pg 28 of notice): Service Fees on Chinese-operated/owned Vessels
Phased fees begin at $0 per net ton of arriving vessel (effective April 17, 2025) to $140 per net ton of arriving vessel (effective April 17, 2028)
Important: The fee will only be charged up to five times per year, per vessel. Pay close attention to the definitions outlined within each annex, specifically how the term, “vessel owner of China” is outlined, as it is very detailed.
Annex II (Pg 30 of notice): Service Fees on Chinese-built Vessels
This section splits fees into two options and the vessel operator must pay the higher of these two fee calculation methods:
Arriving Vessel Fee: Phased fees begin at $0 per net ton of arriving vessel (effective April 17, 2025) to $33 per net ton of arriving vessel (effective April 17, 2028)
OR (must pay higher of these two fee calculation methods)Container Discharge Fee: Phased fees begin at $0 for each container discharged (effective April 17, 2025) to $250 for each container discharged (effective April 17, 2028)
Important: The fee will only be charged up to five times per year, per vessel. Additionally, there are certain caveats to the fees proposed in this annex, including exemptions for U.S. government cargo and Chinese-built vessels that meet certain parameters outlined in the notice. Additionally, the government will suspend fees for a period not to exceed three years if the vessel owner orders and takes delivery of a U.S.-built vessel of equivalent or greater net tonnage.
Annex III (Pg 32 of notice): Fees on Foreign-built Vehicle Carriers
Pay close attention to the outlined requirements for U.S. built vessels. The notice states the vessel must be built in the U.S., documented under laws of the U.S., and (very importantly) have all major components, as well as specific ship components outlined in the notice, manufactured in the U.S.
Fees begin at $0 on the entering non-U.S. built vessel (beginning April 17, 2025) and increase (by October 14, 2025) to $150 per Car Equivalent Unit (CEU) capacity of the entering non-U.S. built vessel.
Important: The government will suspend fees for a period not to exceed three years if the vessel owner orders and takes delivery of a U.S.-built vessel of equivalent or greater net tonnage.
Annex IV (Pg 34 of notice): LNG Export Restrictions Promoting U.S. Vessel Usage
Exports of LNG shall be transported on vessels that receive a license consistent with this Annex and meet the requirements as described below on an annual basis.
For all LNG intended for exportation by vessel in a calendar year, the following percentage must be exported by a U.S.-built vessel that meets the requirements described as follows:
From April 17, 2025 to April 16, 2028: no restrictions
From April 17, 2028 to April 16, 2031: one percent on U.S.-flagged and U.S.-operated vessels
From April 17, 2031 to April 17, 2047, the amount increases each year until it hits a rate of fifteen percent in 2047.
Important: The government will suspend fees for a period not to exceed three years if the vessel owner orders and takes delivery of a U.S.-built vessel of equivalent or greater net tonnage.
Additionally, pay close attention to the outlined requirements for U.S. built vessels. The notice states the vessel must be built in the U.S., documented under laws of the U.S., and (very importantly) have all major components, as well as specific ship components outlined in the notice, manufactured in the U.S.
If terms within this Anne are not met, USTR may direct the suspension of LNG export licenses until terms are met.
Annex V (Pg 37 of notice): Tariff Schedule on Chinese Cargo Handling Equipment and STS Cranes
This Annex proposes additional duties (20% to 100%) on cargo-related products of China. The annex provides explanations on what products and HTS codes are covered.
