THIS is a crucial moment for ocean transport pricing. The shipping industry is now in wait-and-see mode on two pivotal and simultaneous proposals overseen by the US Trade Representative: the highly controversial port fee plan and reciprocal tariffs scheduled to begin on April 2.

Trade flows to and from the US could see significant changes in the near future if the Trump 2.0 administration goes “bigly” on port fees and reciprocal tariffs at the same time.

The USTR began its hearings on the port fee plan on Monday. So many businesses opposed it that USTR had to add a rare second day of hearings, on Wednesday, to fit in all the complaints.

Almost 400 public comments have been filed by businesses, industry groups and private citizens on proposed fees of $1m or more for every call for China-built ships and non-China-built ships of operators that have Chinese ships in their fleets or newbuildings on order in China.

The large majority of filed comments are negative. It is hard to recall any other US maritime policy proposal that has ever received this level of criticism, with the possible exception of the circa-1920 Jones Act, which had a 105-year head start.

Will business responses matter?

It’s still unclear whether business testimony on Monday and Wednesday will matter to the outcome.

US President Donald Trump will ultimately decide whether port fees go forward. The port fees appear partly designed to punish China and partly to fund a US shipbuilding revival. Trump backs the plan to build ships in the US “very fast, very soon”. A draft executive order on US shipbuilding includes the port fees.

If Trump signs the executive order, the USTR must impose the port fees, regardless of what businesses say during this week’s hearings.

“We will be announcing a massive new programme,” said Trump during a press conference earlier this month. “We’re building large ships. The largest ships in the world. It will have to do with incentives and taxes — [taxes] will be coming from all over the world, just like we’ve done with tariffs.”

The hope from the shipping side is that the port fee language will be watered down in response to importer, exporter and shipping industry backlash, averting a worst-case scenario of pandemic-level supply chain disruptions.

But at the recent TMP25 conference in Long Beach, California, panelists voiced scepticism on the power of businesses or even agency heads to steer the Trump 2.0 administration.

According to Scott Lincicome, a vice-president at the Cato Institute, “[USTR] Jamieson Greer is an established trade attorney who has worked in the weeds and understands the mechanisms of global supply chains. But there are others who don’t grasp that complexity — probably including our president.

“And there is a tension: Does someone like Greer actually have a voice or is he a backbencher? [Former USTR] Robert Lighthizer had a lot of sway in the former Trump administration but it’s not really clear that Greer’s going to have that. This brings up all sorts of problems because there seems to be a real disconnect between rhetoric and business reality.”

This week’s hearings are actually the second round of feedback on the proposed port fees. The first was in May 2024. The World Shipping Council clearly pointed out the practical consequences for the supply chain at that time. The USTR port fee proposal went ahead anyway this February, with even higher fees than what were contemplated last May.

Some optimism on tariff front

On the tariff front, the stock market surged on Monday following reports from both Bloomberg and the Wall Street Journal that the tariffs to be announced April 2, which Trump calls “Liberation Day”, will be more focused than previously expected.

But the tariff outlook for April 2 is still ominous for ocean cargo flows.

Sectoral tariffs on pharmaceuticals, automobiles and semiconductors will be delayed, according to the WSJ, but reciprocal tariffs will go forward on the so-called “Dirty 15”, the 15% of nations with “persistent trade imbalances with the US”. The “Dirty 15” targets are not yet public, but the WSJ listed the nations with the largest goods deficits in 2024, and they include leading US ocean shipping partners such as China, the EU, Vietnam, Taiwan, Japan, South Korea, India and Thailand.

The pricing concern for US cargo shippers — which is, in turn, a demand concern for ocean carriers — is that port fees and reciprocal tariffs could strike simultaneously.

“We are concerned that the trifecta of China and reciprocal tariffs, the new aluminium and steel tariffs, and the China ship fee will put extraordinary pressure on US retailers,” said a member of the National Retail Federation in a statement released on Monday.

The best-case scenario for shipping could be that the stock market comes to the rescue, or at least delays the fallout. Trump’s tariffs on Mexico and Canada were temporarily reversed after sharp stock declines. If the reciprocal tariffs starting April 2 cause a similar stock market plunge, the administration might be more amendable to delaying or at least paring down the USTR port fee plan.

Public hearings dominated by opposition

The USTR hearing is technically public, but no recorders were allowed in the proceedings and it was not streamed, as in the case of public congressional hearings (the USTR will eventually release transcripts).

There is no secret about what happened, however. Testifiers submitted comments on what their arguments will be, and in some cases, detailed testimonies were released by industry groups on Monday.

Monday’s hearing featured 30 testimonies. Previously filed comments imply that 10 favoured the port fee plan and 20 opposed the fees or are requesting changes, even as they voice support for a revival of US shipbuilding.

The hearing on Monday was frontloaded towards US interests that supported the port fees, mainly unions and steel producers. After Monday’s morning sessions, the support ran dry.

Wednesday’s overflow hearing will feature 32 testimonies, with two expected to be positive based on previously filed comments, 28 warning of problems with the fees, and two with unclear positions.

Wednesday will feature testimonies by large organisations opposing aspects of the current USTR language, including the NRF on the containerised import side, the Agriculture Transportation Coalition (AgTC) on the containerised export side, the National Mining Association for dry bulk cargoes, and the American Petroleum Institute for tanker cargoes.

AgTC offered a preview of what its executive director Peter Friedmann will say on Wednesday. “The hogs in China couldn’t give a damn where the soybeans come from. You’ve essentially told those [US] exporters you’re out of business.”

The NRF will question whether the US has the right under Section 301 of the Trade Act to implement the port fees. “The proposed actions seek to promote the US shipbuilding industry,” the NRF will testify. “The legislative history of Section 301 does not justify USTR using Section 301 for this purpose.”

The NRF will also warn of potentially dire consequences.

“Has USTR considered the risk of mass shortages in the US for a wide array of essential products resulting from the likely supply chain issues that would arise?”