As part of a broad trade truce between the world’s two largest economies, the United States and China have agreed to suspend tit-for-tat port fees on each other’s vessels for one year. It marks a major pause in the Trump administration’s efforts to counter China’s maritime industry dominance and boost US shipbuilding capacity.
Following talks in Busan, South Korea, President Donald Trump announced Thursday that he had reached an agreement with Chinese President Xi Jinping to reduce tariffs on China in exchange for Beijing’s commitment to crack down on illicit fentanyl trade, resume purchases of U.S. soybeans, and maintain rare earths exports.
“Following the US suspension, China will also suspend its countermeasures against the US for one year,” the Commerce Ministry said in a statement.
Under the agreement, the US will “cancel the 10% so-called ‘fentanyl tariffs’ and suspend, for an additional year, the 24% reciprocal tariffs levied on Chinese goods,” the Commerce Ministry added. This reduces the overall US tariffs on Chinese goods to 47%.
However, observers pointed out that there was no immediate indication of when the pause takes effect and what will happen to the port fees already paid by ship operators since the reciprocal levies were implemented on Oct. 14.
The International Chamber of Shipping welcomed the agreement. It said it looks forward to receiving confirmation and further details. “The reports of the U.S.’ agreement to suspend the Section 301 port fees on China’s maritime, logistics and shipbuilding industries by one year, and the agreed reciprocal suspension of China’s countermeasures targeting US linked ships, is a welcome and positive development,” the ICS stated.
The ICS reiterated that while it supports the ambition to increase U.S. shipbuilding capacity, “the port fees imposed by the USTR, and subsequently by China as countermeasures to U.S. linked ships, has already posed significant challenges and disruptions for the shipping industry and global trade.”
Xenata foresees no decline in ocean container rates
Meanwhile, Xenata reported that the truce it will not halt the decline in ocean container freight rates in 2026.
Average spot rates from China to the US West Coast on 31 October are down 59% year-on-year at USD 2147 per FEU (40ft container). Spot rates into the US East Coast are down 48% year-on-year at USD 3044 per FEU.
Emily Stausbøll, Senior Shipping Analyst at Xeneta, said: “The US-China truce is a positive development, but it will not suddenly breathe life into weakening ocean container shipping demand on Transpacific trades.
“Tariffs are still high despite the truce and US shippers will use the first half of 2026 to draw down inventories built up through frontloading imports earlier in the year to protect supply chains in the wake of the escalating trade war.
“Xeneta expects global average spot rates to fall up to 25% for the full year 2026 and long term rates to drop up to 10% against this backdrop of subdued demand between the world’s two most powerful trading nations.”
A 12-month truce rather than a long-term trade deal leaves carriers and shippers in uncertain positions, Xenata remarked.
Ms. Stausbøll declared: “Once again we see trade used as a weapon in geo-political wars. USTR port fees have been paused without any progress being made on the issue that was nominally cited as the reason they were needed – strengthening US shipbuilding. Carriers have already repositioned vessels across global shipping services to deal with the threat of the port fees and this disruption is now seemingly all for nothing.
“This agreement is temporary and it lacks detail, so shippers looking to make long-term supply chain decisions are left in limbo. It takes longer than 12 months to set up manufacturing facilities in another nation if a shipper wants to shift supply chains out of China.
“No one can say with any degree of certainty what the situation will be when the truce expires – or even if the agreement lasts the full 12 months.”
(Photo of Cosco vessel at Port of Long Beach)