Donald Trump has ventured into the world of shipping. His administration has elucidated a remarkable policy proposing a list of substantial fees on Chinese-built ships, Chinese ship operators as well as incentives to use US-built vessels.
In a statement from the Office of the US Trade Representative (USTR) on 21 February, the administration asserted its objective was the “elimination of China’s acts, policies, and practices, and in light of China’s market power over global supply, pricing, and access in the maritime, logistics, and shipbuilding sectors, USTR proposes to impose certain fees and restrictions on international maritime transport services related to Chinese ship operators and Chinese-built ships, as well as to promote the transport of U.S. goods on U.S. vessels”.
Whilst the Office of the US Trade Representative said it still invited “comments from any interested person on the proposed actions”, it also outlines a series of “proposed actions”. These are what it calls a “Service Fee on Chinese Maritime Transport Operators” which it defines as a “vessel operator of China to be charged a fee on the international maritime transport being provided (a) at a rate of up to $1,000,000 per entrance of any vessel of that operator to a U.S. port; or (b) per entrance of any vessel of that operator to a U.S. port, at a rate of up to $1,000 per net ton of the vessel’s capacity”. Next it suggests a “Service Fee on Maritime Transport Operators with Fleets Comprised of Chinese-Built Vessels” which will charge any Chinese-built vessel entering a US port or even any shipping line that owns a fleet greater of half or more Chinese-built ships will be charged between US1m to $1.5m per vessel. There are even fees on ships orders, with a “Service Fee on Maritime Transport Operators with Prospective Orders for Chinese Vessels”.
Not that these ideas for tariffs are restricted to penalties on China. There is also an attempt to enforce the use of US-built vessels through the application of a sliding scale for the proportion of cargo that must be carried on US-built ships. This targets a proportion of 5% of export cargo that has to be carried on US built ships by each carrier in three years’ time. There is also the “Service Fee Remission for Maritime Transport via U.S.-built Vessels”, which is a refund of the fees for operating US built ships.
Although the USTR calls these policies “proposed actions” which are the basis for public consultations, the clear tenor of statement is that something like these proposals will form the basis for new policy.
Author: Thomas Cullen
Source: Ti Insight
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