The World Shipping Council has urged the US Trade representative to withdraw its proposal to impose stiff fees on foreign vehicle carriers that call at US ports.
The fees on car carriers were a surprise addition to the planned charges after the initial response to the USTR proposals early this year. Those proposals were the culmination of an investigation set up by the previous Biden administration into the growth of Chinese influence in the global shipping trade. The intention was to revitalize the US shipbuilding industry by incentivizing the use of Jones Act-compliant vessels for imports to and exports from the US, and penalizing vessels manufactured in China and/or operated by Chinese interests.
In a further submission to the USTR the WSC said that “Annex III should be withdrawn in its entirety”. It said that modifications to that Annex, which applies to vehicle carriers could only mitigate the harm it would cause.
The WSC noted that in 2024, the US exported some $60bn worth of US-manufactured automobiles to foreign markets, half of which were transported by seaborne trade. The WSC said that car carriers also transported construction and agricultural machinery, special purpose motor vehicles, and railway and tramway stock – amounting to a further $20bn in 2024, with about a third transported by sea.
“The fees provided for in Annex III apply to all foreign-built vehicle carrier vessels, not just those built in China or those owned or operated by Chinese entities. Nearly all vehicle carrier vessels serving foreign ocean trades of the United States are foreign built. This means that these vessels, with minimal exception, would be subject to the fees provided for in Annex III. These fees could result in the unintended consequence of a reduction in service availability and will lead to cost increases for consumers and U.S. exporters,” the WSC said.
The WSC argued that the proposed fees bore no relevance to tackling China’s dominance in the maritime industry (the stated reason by the US Trade Representative for imposing such fees). “Imposing penalties and fees on all foreign-built vehicle carriers will do nothing to disincentivize Chinese shipbuilding, nor contribute to a competitive US vehicle carrier construction effort… It is inconceivable how imposing a fee on all foreign built vessels would deter or disincentivize the behaviour by China that USTR found actionable”.
The WSC said that the inclusion of non-Chinese built vessels within the scope of the fees left China with its existing price advantage vis-à-vis third-country shipyards “and therefore clearly does not incentivize China to alter its acts, policies, and practices”.
The investigation had begun because several US unions had asked for it. The workforce representatives felt that China had targeted the maritime sector for dominance, and that this hurt American shipbuilding and its shipping industries.
The US Trade Representative agreed, and after the presidential election a report appeared, finding that China had indeed successfully targeted the maritime sector and had caused harm to American interests.
That led to a sequence of notices and consultations on the possibility of imposing fees on China-related ships and shipping so as to reduce that dominance. The response was high and mainly critical, pointing out many of the flaws in the proposals, including the fact that China’s recent expansion had hit Japan and South Korea rather than the US, and that the fees would therefore push any shift in manufacturing back towards these countries rather than to the US.
But the major criticism was one of practicality rather than principle. Not only did the US not have ships available, it did not even have the infrastructure capable of building them. In addition, fees would be imposed on ships built in China that were already in operation. Shipping companies could not just swap these over for non-Chinese ships, although there were several announcements that routes would be reorganized to mitigate the impact of the new fees, which were announced as effective from October 14th 2025, increasing over following years, but being reduced if an operator ordered a US carrier of equivalent or greater size.