On April 17, 2025, the United States Trade Representative (USTR) issued a final notice of action in its investigation under Section 301 of the Trade Act of 1974 of China’s maritime, logistics, and shipbuilding sectors for abusive and discriminatory practices associated with their sector dominance. In addition to introducing new fees and restrictions on Chinese-built, -owned, and -operated vessels, the notice of action also introduces new requirements on liquified natural gas (LNG) tankers and proposes increased tariffs on Chinese ship-to-shore cranes and other equipment used in shipping.

Background

The Section 301 investigation was initiated on April 17, 2024, pursuant to a March 2024 petition from five US labor unions alleging the Chinese government engages in abusive and discriminatory practices to unfairly advantage its domestic maritime, logistics, and shipbuilding sector. The specific alleged conduct includes: industrial planning and policies designed to unfairly capture market share; directing mergers; providing non-market advantages to Chinese firms in key upstream inputs; creating a network of upstream suppliers and foreign ports that allow firms the advantageous use of information; tolerating IP theft; and controlling freight rates and capacity allocations.

In January 2025, the USTR issued a notice of determination finding that the allegations in the petition were actionable and the following month issued a notice of proposed action recommending service fees for Chinese vessels. The final notice modifies the fee measures from the earlier notice of proposed action to make them slightly less burdensome. For example, the final notice of action removes earlier proposed fees based on the total number of Chinese built vessels in an operator’s entire fleet.

The fees on Chinese ships will be phased in gradually. Separate fee schedules will apply to Chinese vessel operators and owners, Chinese-built vessels and vessel operators of foreign vehicle carriers. The fees are non-cumulative, meaning only a single fee will apply per vessel. Accordingly, a Chinese-owned or -operated vessel that is also Chinese-built will only pay the fee pertaining to Chinese-owned or -operated vessels. The fee on foreign-built vehicle carriers will apply to all foreign-built vehicle carriers and no additional fees will be due on Chinese-built, -owned, and -operated vehicle carriers.

Fees on Chinese-Owned and Chinese-Operated Vessels

The multifold definition of Chinese ownership under the final notice of action includes any entity:

• whose country of citizenship is identified as the People’s Republic of China (PRC), Hong Kong, or Macau on the Vessel Entrance or Clearance Statement;
• whose headquarters, parent entity’s headquarters, or parent entity’s principal place of business is the PRC, Hong Kong, or Macau;
• owned by, or controlled by, a citizen or citizens of the PRC, Hong Kong, or Macau;
• is owned by, controlled by, or subject to the jurisdiction or direction of the PRC, Hong Kong, or Macau;
• is owned by, or controlled by, an entity listed as a Chinese Military Company; or
• is an ocean common carrier, as defined in 46 U.S.C. 40102(7), that is, or whose operating assets are, directly or indirectly, owned or controlled by the government of the PRC or any of its political subdivisions.

Equivalent criteria apply to determine whether an entity is a Chinese operator.

The applicable fees for Chinese-owned and -operated vessels must be paid on or before the entry of a vessel at the first U.S. port. Fees can be charged up to five times per year on a single vessel. The fees will be calculated per tonnage as follows:

Effective Date	Fee Amount
Prior to October 14, 2025	No fee
From October 14, 2025	$50 Per Net Ton
From April 17, 2026	$80 Per Net Ton
From April 17, 2027	$110 Per Net Ton
From April 17, 2028	$140 Per Net Ton

Fees on Chinese-Built Vessels

The final notice specifies that a “Chinese-built  vessel is a vessel that was built in the People’s Republic of China, consistent with the definition of place of build in CBP and U.S. Coast Guard (USCG) regulations[.]”

The fee for Chinese built vessels will have to be paid upon the arrival of the vessel to a U.S. port or point from outside the Customs territory on a particular string. As with the fee on Chinese-owned and operated vessels, the fee can accrue up to five times in a single year per vessel. The fee may be suspended for a period of up to three years if the vessel owner orders and takes delivery of a US-built vessel of equivalent or greater net tonnage.

The final notice includes two separate fee calculations — one calculated on a per tonnage basis and the other calculated per container. The operator of the vessel will have to pay the higher calculated fee.

Per Ton:

Effective Date	Fee Amount
Prior to October 14, 2025	No fee
From October 14, 2025	$18 per net ton
From April 17, 2026	$23 per net ton
From April 17, 2027	$28 per net ton
From April 17, 2028	$33 per net ton

Per container:

Effective Date	Fee Amount
Prior to October 14, 2025	No fee
From October 14, 2025	$120 per container discharged
From April 17, 2026	$153 per container discharged
From April 17, 2027	$195 per container discharged
From April 17, 2028	$250 per container discharged

Fees on Foreign-Built Vehicle Carriers

In addition to the fees on Chinese vessels, the final notice imposes service fees on foreign-built vehicle carriers. This fee will apply to all foreign-built vehicle carriers (i.e., not just of Chinese origin) and irrespective of the nationality of the owner or operator. The final notice defines a “vehicle carrier” as a “vessel principally identified as a ‘Vehicle Carrier’ on CBP Form 1300, or its electronic equivalent” and also provides that “a vessel is normally principally identified as a vehicle carrier when the vessel is designed for wheeled or tracked cargo that can load itself on-board. Cargo generally drives onto the vessel through decks via ramps, rather than being lifted through hatches.”

A vehicle carrier is foreign-built unless:

• it is built in the US;
• it is documented under the laws of the US;
• all of its major components of the hull or  superstructure of the vessel are manufactured in the US; and
• certain components (listed in the final notice) are manufactured in the US.

The fee will be due on or before the entry of a non-US built vessel at the first US port. As with the fees on Chinese ships, the fees on foreign vehicle carriers do not apply prior to October 14, 2025. But unlike the fees on Chinese ships, the fees will not otherwise be phased in. From October 14, 2025, a fee of $150 per Car Equivalent Unit (CEU) capacity will be charged to vessel operators. The fee may be suspended up to three years if the vessel owner orders and takes delivery of a U.S.-built vessel of equivalent or greater CEU.

Restrictions on LNG Exports

In addition to the service fees on vessels, the final notice introduces new requirements on vessels used to export LNG. Starting from 2028, specified percentages of LNG exports will have to be carried on US-built, US-flagged, and US-operated vessels as follows:

Effective Date	Requirement
From April 17, 2028	1% on US-flagged, US.-operated vessels
From April 17, 2029	1% on US-owned, US-flagged, US.-operated vessels
From April 17, 2031	2% on US-owned, US-flagged, US.-operated vessels
From April 17, 2032	3% on US-owned, US-flagged, US.-operated vessels
From April 17, 2034	4% on US-owned, US-flagged, US.-operated vessels
From April 17, 2036	6% on US-owned, US-flagged, US.-operated vessels
From April 17, 2038	7% on US-owned, US-flagged, US.-operated vessels
From April 17, 2041	9% on US-owned, US-flagged, US.-operated vessels
From April 17, 2043	11% on US-owned, US-flagged, US.-operated vessels
From April 17, 2045	13% on US-owned, US-flagged, US.-operated vessels
From April 17, 2047	15% on US-owned, US-flagged, US.-operated vessels

No such requirements will take effect before 2027. The percentages will be determined based on the prior calendar year’s total LNG that was exported by maritime transport as reported by the Department of Energy. The requirements may be suspended for a particular vessel for up to three years if the vessel owner orders and takes delivery of a US-built vessel of equivalent or greater LNG capacity.

Proposed tariffs on Chinese Ship-to-Shore Cranes and Cargo Handling Equipment

The final notice of action also proposes duties on Chinese cranes and cargo handling equipment as follows:

Item	HTSUS	Rate
Containers	8609.00.00	20% to 100%
Chassis	8716.39.0090	20% to 100%
Chassis parts	8716.90.30	20% to 100%
Chassis parts	8716.90.50	20% to 100%
Ship-Ship-to-shore gantry cranes, configured as a high- or low-profile steel superstructure and designed to unload intermodal containers from vessels with coupling devices for containers, including spreaders or twist-locks.	Provided for in subheading 8426.19.00.	100%

Additionally, the 100% proposed tariffs would also apply to Chinese ship-to-shore cranes and those incorporating certain Chinese components (i.e., main booms, trolleys, spreaders, cabins, legs, cable reels,  power supplies, bogie sets and wheels, and information technology equipment). If an importer is unable to attest to the source of a ship-to-shore crane, such equipment may also be subject to the 100% duty. Stakeholders may submit comments on the proposals until May 19, 2025.

Next Steps

The final notice could result in substantial impacts on shipping, with ripple effects across sectors that rely on Chinese shipping and supply chains. Organizations that are directly impacted by the measures in the final notice — shipbuilders, carriers, vehicle importers, exporters of LNG — should take immediate steps to assess the impact of the new measures on their businesses. Organizations in areas downstream of these sectors, which are too numerous to list, should also take note and consider strategies to mitigate the impact of the new fees, restrictions and proposed duties on their operations and profitability.