AFTER all the Sturm und Drang, US and Chinese port fees have been put on hold.

China’s Ministry of Commerce said on Thursday that the US agreed to pause its fees for a year, after which China will pause its own fees.

But the framework announced on Thursday, which also includes a 10% reduction in US tariffs on Chinese goods, does not have immediate effect.

This could lead to some short-term market inefficiencies that are positive for rates, depending how long it takes to halt the levies.

US Customs was still collecting port fees as of Thursday morning. If these fees are halted soon — for example, next week —  Chinese container lines Cosco and OOCL could save millions by temporarily parking their containerships off the US coastline.

The same goes for operators of foreign-built vehicle carriers, who are paying around $1m per US call, capped at five fees per ship per year. If the pause happens soon, why not just delay arrival?

On the Chinese side, charterers of very large crude carriers that have any possible link to US ownership might just play it safe and have those VLCCs wait at anchor until China stops charging fees.

Looking beyond the next few weeks, there is a negative angle to the port fee pause.

US and Chinese levies effectively reduce tonnage available to serve bulk commodity markets, and thus lower the competition for cargoes. Removing the fees means ships will have the same destination flexibility they had before.

That said, it’s only a pause, not a cancellation. There could still be lingering market prejudices; perhaps there will be a continued aversion to Chinese sale-and-leaseback finance, or a reluctance to take Chinese ships on long-term charter if they serve US markets.

There are also implications for US shipbuilding.

The plan was to use revenues from US port fees to help fund America’s shipbuilding revival. That revenue stream had already been sharply reduced by widescale fee exemptions announced in April.

Now there won’t be any fee revenue.

The last-minute tripling of fees on foreign-built vehicle carriers was meant to incentivise these operators to build new ships in the US. Reviving domestic vehicle-carrier construction is a priority for America, given its military’s sealift needs.

The implied threat was: build your vehicle carriers in our country or we’ll render your US services unprofitable.

Unless the US Trade Representative retains port fees for non-China-built vehicle carriers — which would be surreal, given that port fees are supposedly targeting Chinese shipbuilding and maritime — that threat will be put on hold.

Meanwhile, a key avenue for US shipbuilding support is the SHIPS for America Act, introduced in the current Congress in April. It has yet to make progress, and US legislators still can’t even agree to reopen their own government.

If Congress gets its act together and passes the SHIPS Act in 2026, there would be a problem. This legislation calls for port fees on Chinese-built tonnage, the very thing US President Donald Trump and Chinese President Xi Jinping just agreed to pause.

Greg Miller
Senior maritime reporter, Lloyd’s List

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