In announcing watered down measures from a February proposal for port fees on China-built vessels in order to revive American shipbuilding, the U.S. Trade Representative (USTR) Thursday also accorded a reprieve to owners of vessels servicing the Great Lakes, the Caribbean and U.S. territories.
There was notably positive news for senior representatives of Canadian Great Lakes shipping firms who had testified during March public hearings of the USTR, underscoring the need to protect inland and coastal shipping as well as the integrated North American supply chain. They affirmed that the port fees would make shortsea shipping economically unfeasible, render many products and commodities more costly, and shift cargo to already overburdened railways and highways.
In what had sent shock waves through the global shipping industry and U.S. port circles, the USTR had initially proposed fees of up to $1.5 million per port call of a Chinese-built ship.
Rather than a flat individual fee on large vessels, the USTR has now opted to charge fees based on net tonnage or each container unloaded. This was, in fact, recommended by operators of small ships and transporters of such bulk commodities as iron ore.
As of October 14, Chinese-built and owned ships will be charged $50 per net ton, a rate that is to increase by $30 annually over the next three years.
Such a scheme will apply if the fee is higher than an alternative calculation method charging $120 for each container discharged, rising to $250 after three years.
“Ships and shipping are vital to American economic security and the free flow of commerce,” U.S. Trade Representative Jamieson Greer said in a press release. “The Trump administration’s actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.”
Vessel owners can be eligible for a remission of the fees if they can provide proof of a U.S. shipbuilding order. The remission of the fee would be based on a net tonnage capacity of equal to or less than the U.S. built vessel ordered. “If a prospective vessel owner does not take delivery of the U.S.-built vessel ordered within three years, the fees will become due immediately,” the USTR report said.
Foreign roll-on/roll-off auto carriers would be are eligible for refunds of fees if they order or take delivery of a U.S.-built vessel of equivalent capacity in the next three years.
For LNG carriers, the USTR set a long timeline. They must move 1% of U.S. LNG exports on U.S.-built, operated and flagged vessels within four years. That percentage climbs to 4% by 2035 and to 15% by 2047.
Meanwhile, at a May 19 scheduled hearing, the USTR plans to discuss proposed tariffs on ship-to-shore cranes – a manufacturing sector largely dominated by China. In this regard, USTR is looking at charging a levy of 100%.
(Photo of US Trade Representative Jamieson Greer and David Schauer photo of Canada Steamship Lines vessel calling the Port of Duluth-Superior)