This Tuesday, the United States and China began charging additional port fees to shipping companies that transport everything from Christmas toys to crude oil, turning the high seas into a key front in the trade war between the world’s two largest economies.
Last week, a return to an all-out trade war seemed imminent, after China announced a major expansion of its export controls on rare earths and President Donald Trump threatened to raise tariffs on Chinese goods into triple digits.
However, after the weekend, both sides tried to reassure traders and investors, highlighting the cooperation between their negotiating teams and the possibility of finding a solution.
China said it had begun charging special fees for US-owned, operated, built or flagged ships, but clarified that ships built in China would be exempt from the levies.
In details published by state broadcaster CCTV, China detailed specific provisions on the exemptions, which also include empty ships entering Chinese shipyards for repair.
The additional port fees imposed by China would be collected at the first port of entry of a single voyage or the first five voyages in a year, following an annual billing cycle that begins April 17.
Earlier this year, US President Donald Trump’s administration announced plans to impose the tariffs on ships linked to China in order to reduce the country’s control over the global maritime industry and boost US shipbuilding.
An investigation during former President Joe Biden’s administration found that China uses unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, paving the way for such sanctions.
China hit back last week, saying it would impose its own port fees on ships linked to the United States starting the same day the US fees took effect. Analysts predict that Chinese shipping company COSCO will be the most affected, as it will bear almost half of the expected $3.2 billion cost of those tariffs for that segment in 2026.
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Cargo freight is exempt from port fees for now
“This tit-for-tat symmetry locks both economies in a spiral of maritime taxes that risks distorting global cargo flows,” Athens-based Xclusiv Shipbrokers Inc. stated in a research note.
A Shanghai-based consultant who advises global companies on trade with China said the new tariffs may not be very disruptive to the industry and that any cost increases would likely be reflected in higher prices.
“What are we going to do? Stop shipments? Trade with the US is already quite affected, but companies are finding a way,” said the consultant, who asked to remain anonymous because he was not authorized to speak to the media.
The US announced last Friday an exemption for long-term charterers of Chinese-operated vessels carrying US ethane and LPG, deferring payment of port fees until December 10.
However, ship tracking company Vortexa identified 45 LPG-carrying VLGCs (11% of the total fleet) that would remain subject to China’s port fee, according to Americas analyst Samantha Hartke.
Clarksons Research said in a report that the new port fees could affect oil tankers, which account for 15% of global capacity. Jefferies analyst Omar Nokta estimated that 13% of oil tankers and 11% of container ships in the global fleet would be affected.
Retaliation
In retaliation against China’s restriction on exports of critical minerals, Trump threatened on Friday to impose additional 100% tariffs on products from China and impose new export controls on “all critical software” by November 1.
Hours later, administration officials warned that countries that voted this week in favor of a United Nations International Maritime Organization plan to reduce planet-warming greenhouse gas emissions from shipping could face sanctions, port bans or punitive charges on ships. China publicly supported the IMO plan.
“The instrumentalization of trade and environmental policies indicates that maritime transport has gone from being a neutral conduit of global trade to a direct instrument of foreign policy,” stated Xclusiv.
Shares of Shanghai-listed COSCO rose more than 2% in early trading on Tuesday. The company announced that its board of directors approved a plan to buy back shares worth up to 1.5 billion yuan ($210.3 million) in the next three months to maintain corporate value and protect shareholders’ interests.
The shipping company did not immediately respond to Reuters questions about port fees.
With information from Reuters
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