US strikes again at China’s maritime commerce with port price – DW – 03/10/2025 | EUROtoday

Holding again financial advance of Chinahas been one of many White House’s main coverage objectives because the first time period of US President Donald Trump .

But a proposal to counter Chinese dominance in shipbuilding, backed by enormous state subsidies, is not a Trump concept. It was petitioned for by 5 United States labor unions underneath the Joe Biden administration.

In February, the United States Trade Representative (USTR), which was tasked with investigating the problem, proposed a $1.5 million (€1.42 million) price for any Chinese-made ship docking at a US port. The price is justified, USTR statedto counteract what it sees as unfair benefits gained by China in shipbuilding that “burden or restrict US commerce.”

Subsidies assist China take the lead

Over the previous three many years, China has develop into the dominant world drive in ship manufacturing. In 2023, China’s share of shipbuilding tonnage crossed the 50% mark, up from simply 5% in 1999. The Chinese authorities has backstopped the sector to the tune of a whole bunch of billions of {dollars} whereas pushing out international opponents.

Despite China’s unimaginable advance, Albert Veenstra, professor of commerce and logistics at Erasmus University Rotterdam, within the Netherlands, criticized the false concept that the Asian large has undermined the once-thriving US shipbuilding business.

“The reasoning is that China has wronged us by creating a shipbuilding industry. As a result, we don’t have a shipbuilding industry anymore. But this is a strange idea,” Veenstra advised DW.

The decline of US shipbuilding is effectively documented. Once the main shipbuilding nation, the nation’s priorities shifted after World War II and the business stagnated. The final main progress spurt was within the mid-Seventies, and the US’ share of the shipbuilding market has been negligible ever since.

It’s Japan and South Korea which have misplaced out to China. Both international locations have seen their mixed market share fall from 60% to 45% over the previous decade, based on information from UN Trade and Development.

Heavy business not returning anytime quickly

“Shipbuilding capacity shifted to Asia in the 1960s and later to China,” defined Veenstra. He added that the US “will never compete again because to do that, you need a viable steelmaking industry, which in the US, has also been dying for 25-30 years.”

Peter Sand, chief analyst at Copenhagen-based delivery analytics agency Xeneta, additionally believes it’s “extremely late” to name out China. However, the proposal “does align with the Trump administration’s target to limit Chinese dominance here, there and everywhere, especially where it relates to American business.”

In early March, Trump doubled the tariff on Chinese items getting into the US to twenty%, whereas imposing 25% levies on imports from neighboring Canada and Mexico. The Republican president has vowed new tariffs on metal and aluminum imports and is even contemplating so-called reciprocal tariffs, the place the US matches the various import tariffs levied on its merchandise by different international locations.

Another measure more likely to trigger worth hikes

The proposed port docking price is predicted to considerably influence the price of delivery items to the US. Even whether it is diminished to $1 million, Veenstra estimates a name at a US port could be 10 occasions costlier for delivery companies than it’s now.

Sand, in the meantime, advised DW that “if a ship were to offload a thousand containers, an extra $1 million fee, for example, would add $1,000 to the cost of each container.” He added that increased delivery prices would increase the worth of imported items and probably assist sluggish the US financial system.

“Few importers can absorb costs like that without passing them on, so it will eat into consumers’ purchasing power and, in the end, lower demand,” Sand warned.

Stephen Gordon, the managing director of Clarksons Research in London, stated the proposed measure might generate combination annual charges for the US of between $40 and $52 billion, “assuming there was initially no change to vessel deployment.”

Clarksons calculated almost 37,000 US port calls final yr by ships that may doubtless face the utmost $1.5 million price resulting from their connection to China, which Gordon stated was equal to 83% of container ship calls however solely round 30% of stops by tankers.

Ships might keep away from US altogether

Shipping companies are already exploring options to keep away from calling at US ports. One technique could be to reroute shipments by Mexico or Canada, after which transport the products by truck or rail to their ultimate vacation spot.

“It may make economic sense to stop at Mexico or Canada instead, which shipping firms have increasingly done over the past five years. West coast Mexican ports were recently operating close to capacity,” Sand famous.

Another method to circumvent the price, notably for non-Chinese operators, is to pick ships with out Chinese-built elements or that weren’t constructed in China. Firms could select to vary possession guidelines that separate their Chinese and non-Chinese fleet to keep away from the charges.

The legality of the proposed price has additionally been questioned, provided that worldwide commerce agreements sometimes intention to stop discriminatory tariffs and charges. So the US might face extra authorized challenges from its main buying and selling companions.

Little optimistic influence anticipated

Furthermore, the proposal is unlikely to result in a big reversal in US shipbuilding, many analysts imagine, which has fallen to lower than 5 new vessels per yr, based on the United States Trade Representative.

“We don’t have the shipbuilding capacity in Europe and the US anymore,” stated Veenstra. “South Korea and Japan don’t have much spare capacity — only China. So I don’t think the market can be easily reformed.”

When mixed with Trump’s different “America First” insurance policies, together with a plan to retake the Panama Canal, the USTR proposal carries important dangers for world commerce and provide chains.

The plan is at present topic to session, a public listening to and a ultimate choice by the Trump administration. Still, Veenstra supplied a bleak outlook not just for China-linked delivery if the proposal is absolutely enacted.

“This regulation will touch all foreign ship owners. There will be only losers in the end,” he stated.

Edited by: Uwe Hessler