Final US port fee plan won’t be released until July at earliest

THERE’S no word yet on when the final US Trade Representative plan on US port fees will be revealed, but it won’t be before the second week of July, a new filing by the USTR has confirmed.

US port fees are set to begin on October 14, giving ship operators who still don’t know the final rules only a limited amount of time to plan fleet redeployments — particularly if a final rule is not released until later this summer.

The highly controversial US port fee plan has five sections: annex I on Chinese-owned and operated ships; annex II on Chinese-built ships; annex III on foreign-built vehicle carriers; annex IV on US LNG cargo preference quotas; and annex V on Chinese-built ship-to-shore cranes.

The USTR has held public hearings and received written comments on annexes I, II and V. It has now announced a request for comment on annexes III and IV, but only on a very restricted basis, targeted on a few proposed tweaks.

Comments are due by July 7, meaning that the final rules cannot be announced until the second week of July at the very earliest.

Asked by Lloyd’s List whether the new round of comments could push the final USTR plan announcement to late July or August, Kathy Metcalf, president of the Chamber of Shipping of America, said, “It’s hard to estimate. I think USTR wants to get this done, but there are other moving parts.”

Those other moving parts include US President Donald Trump’s executive order on US shipbuilding revitalisation (EO 14269), the SHIPS for America Act that has been introduced in Congress, and ongoing US-China trade negotiations over tariffs.

Shipping’s largest segments — container, tanker and dry bulk shipping — are focused on annexes I and II, which impact global deployments as well as sale and purchase, newbuilding, lease finance and scrapping markets.

The fact the USTR did not ask any additional questions on Friday regarding fees for Chinese- owned, -operated or -built ships implies

that there will be no additional input from container, tanker and dry bulk interests.

“My reading is that… annexes I, II and V are effectively closed but they could still make changes based on the comments received on those annexes — although that’s doubtful,” said Metcalf.

Changes for vehicle carriers

The USTR proposed on Friday that the fee for vehicle carriers starting on October 14 be changed from $150 per car equivalent unit to $14 per net tonne.

Several businesses and shipping groups had requested a change from ceu-based calculations.

The World Shipping Council said in its latest submission that ceu “has no universally accepted definition and a vessel’s number of ceu may not be constant because of the ability to adjust deck configurations to account for different types of cargo”.

The WSC also argued that switching to net tonnage, as the USTR is now doing, would be unfair. “Reverting to annex I and II’s use of net tonnage for large, enclosed vehicle carriers is not an appropriate measure as it would result in an outsized negative impact on these vessels.”

The other changes to annex III made by USTR are designed to protect US interests.

Vehicle carriers that are US-owed or US-flagged that are in the Maritime Security Program would be exempt, as would US government vessels, including vessels owned by the government or US-flagged vessels chartered by the government.

Changes for LNG shipping

The energy lobby remains a powerful force and Friday’s proposed changes for liquefied natural gas shipping favour US LNG exporters.

Annex IV mandates that the US begin transporting 1% of its LNG exports on US-flagged LNG carriers starting April 2028, and 1% on US- built LNG vessels starting April 2029, with that percentage escalating to 15% by 2047.

There is widespread scepticism that US yards will be capable of building enough LNG carrier tonnage by these deadlines.

The USTR plan announced in April proposed that “the USTR may direct the suspension of LNG export licenses” until cargo preference requirements are met.

On Friday, it removed that language, which raises the question of how non-compliance with export cargo quotas will be enforced.

Another change on Friday relates to reporting.

Previously, the USTR port fee plan required that the “LNG terminal operator” would be required to report the amount of LNG exports shipped on US- built vessels per year to the Department of Energy, as well as amount shipped on foreign-built vessels.

Friday’s change calls for the “vessel operator” to report these percentages to the DOE. US LNG exports are carried by a wide variety of vessel operators with LNG carriers on both term contracts and on spot voyages loading in the US.

USTR accused of exceeding mandate

After the USTR publishes its final port fee rules, presumably this summer, the plan will be open to legal challenges.

One persistent criticism is that this Section 301 action is focused on Chinese shipbuilding and maritime practices, yet multiple aspects of the proposed action are focused on supporting US shipbuilding.

Indeed, Friday’s statement by the USTR cited a specific connection between its planned action and EO 14269, Trump’s order to support US shipbuilding.

Asked about the reference to the EO Friday’s USTR statement, Metcalf said, “Well, at least they recognise there are other discussions going on with the EO and legislation [SHIPS Act].”

She said, “As per our second round of comments, we are still suggesting that annex III and IV be deleted entirely, as there is no nexus between those two annexes and the Chinese Section 301 violations that were the subject of the investigations and findings. There should be focused penalties on those violations.”

The annex III vehicle carrier fees are designed to incentivise US shipbuilding by providing port fee exemptions for operators that order new vehicle carriers in the US.

According to the WSC submission, “Annex III imposes fees on all foreign-built vehicle carrier vessels, not just Chinese-built vessels. It is inconceivable how imposing a fee on all foreign- built vessels would deter or disincentivise the behaviour by China that the USTR found actionable.

“The annex III fees are entirely removed from the statutory purpose of a Section 301 action — securing the removal of the acts, policies and practices found actionable in the underlying investigation,” wrote WSC.

Wallenius Wilhelmsen said in its submission, “By imposing annex III port fees on all vehicle carriers of any nationality [that are] operating ships made in Japan, South Korea and other countries have been found guilty of no wrongdoing in the investigative report, USTR has exceeded its statutory authority under Section 301.”

Annex IV on LNG cargo preferences faces the same criticism.

According to Lloyd’s List Intelligence data, just 6% of the existing LNG carrier fleet was built in China, and according to data tracked by LLI, only 28% of LNG carriers on order are being built in China. The majority of LNG ships are built in South Korea.

The International Chamber of Shipping said in its latest USTR submission, “The restriction on maritime transport of LNG under annex IV are not relevant to the Chinese acts, policies and practices identified in the Section 301 investigation”, meaning that the USTR has “exceeded its authority”.

Poten & Partners senior adviser Gordon Shearer said during a recent presentation, “Rather than the announced reason for this trade action, [the LNG cargo preference requirement] seems to be trying to promote US shipbuilding.”

Lloyd's List Daily Briefing 10 June 2025

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