US Resistance Towards China or the New Dawn of U.S. Shipping?

US’s efforts to counter China’s dominance in shipping are gaining momentum with proposed tariffs, legislative action and executive measures shaping the future of U.S. shipping.

For those who keep an eye on political developments in Washington D.C., the U.S. Trade Representative (“USTR”) Notice of Proposed Action in Section 301 Investigation of China’s Targeting of the Maritime Logistics and Shipbuilding Sectors for Dominance (“Notice”)[1] may not have come as a surprise. The initiation of the Section 301 investigation started in early 2024 and those who knew about the ongoing investigation (and the potential resulting actions) were worried - very worried. 

Industry participants are sometimes surprised to learn that addressing the risks posed by China’s dominance in shipping (and U.S. Shipping’s decline) is a bipartisan issue – it started while President Biden was still in power. The “port tariff issue”, as some industry players might refer to it, isn’t just about President Trump’s aversion towards China - it is one component of a much more ambitious project. 

In May 2024 (shortly after the USTR investigation began) Senator Mark Kelly (a Democrat from Arizona) and Representative Michael Waltz (a Republican from Florida), together with Senator Marco Rubio (a Republican from Florida) and Representative John Garamendi (a Democrat from California) released a bipartisan report entitled “Congressional Guidance for a National Maritime Strategy”[2] In October 2024 Kelly and Waltz went on to announced their work on the SHIPS for America Act (the “SHIPS Act”) which was a direct result of the aforementioned report. The SHIPS Act was then formally introduced at the end of the 118^th Congress[3]. 

While the SHIPS Act will need to be reintroduced in the 119^th Congress in order for it to be passed into law, the political winds are blowing in its favour. In his remarks in the Joint Address to Congress on 6 March 2024, President Trump announced that he was going to “resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding.”[4] Two of the SHIPS Act’s key advocates now have the close ear of the President - Michael Waltz is President Trump’s National Security Advisor and Marco Rubio is the Secretary of State. 

The Notice and its corresponding hearing on Monday, 24 March 2025[5], have generated a tremendous amount of attention in the industry over the past few weeks. Concerns have been raised about both the drafting of the Notice and the tremendous impact that the proposed fees would have both within and outside the U.S. 

The hype surrounding the “port fee issue” was further heightened by the circulation of a draft executive order, the “Executive Order To Make Shipbuilding Great Again” (the “EO”), which if signed in an unrevised format, would ultimately require USTR to impose certain fees and tariffs on Chinese built or flagged vessels that dock in U.S. ports, certain cargo handling equipment (again, with a Chinese connection), and vessels that are part of a fleet which includes Chinese built or flagged vessels. It is anyone’s guess as to when, or even if, the EO will be signed. 

The writing on the wall, however, indicates that this is a bigger issue than port fees imposed on unsuspecting shipowners who purchased vessels in China. There are common threads between the USTR Notice, the EO and the SHIPS Act. The USTR Notice and the EO, for example, both discuss coordinating with allies and partners to reduce dependencies on China, and the EO and the SHIPS Act extensively address the issue of maritime workforce development. 

While we will refrain from the impossible task of prognosticating what port fees, if any, might be introduced, it would be naïve to think that the SHIPS Act, in some format, won’t be implemented. What that means for US Shipping, however, is anyone’s guess for now. 

[1]https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-china-targeting-maritime-logistics-and-shipbuilding-sectors-dominance

[2]https://www.kelly.senate.gov/wp-content/uploads/2024/05/Congressional-Guidance-for-a-National-Maritime-Strategy.pdf

[3]https://www.congress.gov/bill/118th-congress/house-bill/10493

[4]https://www.whitehouse.gov/remarks/2025/03/remarks-by-president-trump-in-joint-address-to-congress/

[5]https://ustr.gov/about-us/policy-offices/press-office/press-releases/2025/february/ustr-seeks-public-comment-proposed-actions-section-301-investigation-chinas-targeting-maritime