President Donald Trump’s administration is considering imposing million-dollar fees on Chinese shipping companies and companies elsewhere that use China-built cargo ships – a move that, if enacted, could send ocean transport costs soaring and potentially drive up prices on a host of imported goods, including promotional products.

The Office of the United States Trade Representative announced the proposal on Feb. 21^st and is inviting public comment through March 24^th.

“For containerships, their costs will be at least 10 times higher than existing charges and affect American importers, exporters and consumers,” Lars Jensen, chief executive of Demark-based Vespucci Maritime, which advises leading shipping lines, told The Wall Street Journal. “I hope that the public debate will avert this madness.”

The Proposal & Reactions

Under the plan, the U.S. would charge a China-based shipping company a fee of $1 million every time one of the company’s vessels enters a U.S. port – or a rate of up to $1,000 per net ton of the vessel’s capacity.

Operating through massive state-owned companies like Cosco, the world’s biggest shipping company in terms of capacity, China held about 19% of the world’s commercial shipping fleet as of January 2024, the U.S. government has found.

Meanwhile, shipping companies based outside of China that use even some China-made ships in their fleets would face fees of up to $1.5 million per U.S. port call for any of their ships. The fee would be based on the percentage of China-made ships in a non-Chinese company’s fleet. Having as much as a single vessel built in China would lead to a $500,000 charge to the shipping company every time one of its ships comes to drop off or pick up cargo in the U.S.

19%
Percentage of the world’s commercial shipping fleet that China operates. (USTR)

Ocean transport companies based outside China could also face additional fees for doing business with China-based shipbuilders. For example, such firms would face an additional fee of $1 million every time one of their ships enters a U.S. port if 50% or more of their orders for future vessels are in Chinese shipyards or if the same percentage rate of vessels expected to be delivered to them in the next 24 months is made in Chinese shipyards. Having on order just one ship from a Chinese shipyard would result in a $500,000 per-call charge for the shipping operator, the proposal detailed.

Maritime analysts said shipping companies simply won't be able to swallow the fees. They’ll pass the costs along to their clients, which will include businesses that import into the U.S., like promo suppliers, as well as those who export.

“The plan will send tremors through the maritime supply chain serving the world’s largest market, where major ocean carriers operate in a complex network of cooperation ranging from service routes to berthing arrangements and sharing of vessels,” Freight Waves reported. “Carriers will likely pass on the expensive new fees to shippers in the form of surcharges and higher rates, who in turn will pass them on as higher prices for imported goods.”

Promotional products companies were among those trying to wrap their heads around USTR’s proposal. The U.S. promo industry imports the vast majority of products it sells here from overseas factories, especially those based in China and other Asian nations.

“Strategic planning regarding importing should be taking place right away to try and avoid any sudden changes in supply or pricing. We will be doing everything we can to mitigate price increases.” George Morgan, HIRSCH (asi/61005)

Speaking to ASI Media, Houston-based hard goods supplier HIRSCH (asi/61005) noted that the fees proposal would not just impact China-made products/imports, but all international goods coming into the U.S.

Taken along with potential cost impacts from existing or possible Trump administration tariffs, promo product price increases would be practically inevitable if USTR’s plan came to fruition, HIRSH felt.

“If this does indeed go through, we can certainly expect to see prices increase for imported goods,” George Morgan, director of marketing for HIRSCH, told ASI Media. “How severe or how quickly is still unknown.”

Added Morgan: “Strategic planning regarding importing should be taking place right away to try and avoid any sudden changes in supply or pricing. We will be doing everything we can to mitigate price increases and will be watching the situation very closely.”

The USTR plan would also require that U.S.-flagged and U.S.-built vessels carry a particular percentage of exports, with the percentage increasing in the coming years. For instance, U.S. operators would be required to carry at least 1% of U.S. exports this year. The rate would rise so that seven years from now, 15% of exports would need to ship out on U.S.-flagged vessels, including 5% on U.S.-built vessels.

USTR’s Perspective

In the proposal, USTR said that a recently concluded study it conducted determined that China was advancing unfair trade practices in the maritime, logistics and shipbuilding sectors to gain global dominance, a strategy that’s largely proved effective.

For example, in addition to operating 19% of the world’s shipping fleet, China now accounts for more than 50% of the planet’s shipbuilding market, while also controlling production of 95% of shipping containers and 86% of the Earth’s supply of intermodal chassis, as well as other components and products, USTR said. 

That’s bad news for the U.S. and free markets, according to USTR.

More than 50%
of the world’s shipbuilding now occurs in China. (USTR)

Said USTR: “China’s targeting of the maritime, logistics and shipbuilding sectors for dominance is unreasonable because it displaces foreign firms; deprives market-oriented businesses and their workers of commercial opportunities; lessens competition; and creates dependencies on China, increasing risk and reducing supply chain resilience.”

Furthermore, China’s stronghold on the maritime, logistics and shipbuilding sectors “burdens or restricts U.S. commerce by undercutting business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors; restricting competition and choice; creating economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the U.S. economy; and undermining supply chain resilience.”

The hefty fees USTR is considering aim to diminish China’s dominance.

Bigger Picture

The shipping fee proposal comes as part of broader measures the Trump administration is taking in efforts it says are aimed at protecting American economic and security interests.

The primary component of those initiatives so far has been tariffs, including an additional tariff rate of 10% of China-made goods that Trump imposed earlier this month. Trump is also considering “tit-for-tat” reciprocal tariffs on nations around the globe.

Got an opinion on the president's interest in imposing “#reciprocal #tariffs” on nations around the globe? The federal government says it wants to hear it. A public comment period just opened but doesn't last long.https://t.co/A5zw6zfaTt

— Chris Ruvo (@ChrisR_ASI) February 21, 2025

The president implemented and then suspended until at least March 4^th tariffs of 25% on imports from Canada and Mexico; they remain very much a possibility, though could face legal challenges. Among other measures, Trump on Feb. 10^th ratcheted up tariffs on steel and aluminum imports.

Suppliers have said the tariff actions on China alone are likely enough to propel price increases on promo products. Importers, like suppliers and distributors that do business directly with overseas manufacturers, pay the tariffs, not foreign governments or companies.