John Drake John Drake
Vice President, Transportation, Infrastructure, and Supply Chain Policy, U.S. Chamber of Commerce

Published

March 24, 2025

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The Trump Administration is opening a new front in its confrontation with China, this time on shipbuilding.

Ocean vessels play a crucial role in global trade. In 2023, over 74,000 cargo ships made calls at U.S. ports alone, transporting over $2.1 trillion in U.S. exports and imports. However, there is a serious concern that China is leveraging subsidies, strategic policies, and anti-market practices to dominate ocean shipping. This includes the construction of new ships, subsidizing its own ocean carriers, and controlling key ports, which undermine American competitiveness and national security. Indeed, China today is building more commercial vessels than ever, and this is creating a rapidly escalating national security challenge that demands urgent attention and public-private cooperation.

The Trump Administration is responding by continuing a Biden-era investigation by the Office of the U.S. Trade Representative (USTR) that now proposes to charge U.S. businesses and farmers a fee of up to $3.5 million for using a Chinese-made ocean vessel—or an ocean carrier that uses Chinese-made vessels—for importing or exporting their products. The investigation goes one step further by proposing export restrictions on U.S. businesses and farmers unless they can secure a U.S.-flagged vessel.

Why Does this Matter to American Businesses and Consumers? 

Implementing these proposals would put American businesses, farmers, and consumers in an incredibly difficult position. The World Shipping Council estimates that these fees would increase shipping costs by 25% for most goods, adding $30 billion in new costs for American consumers annually.

Shipping routes will change—and not to the benefit of most Americans. To avoid the fee, American businesses will seek to alter shipping routes—resulting in fewer stops except at the largest U.S. ports. This could create situations similar to pandemic-era port backlogs – while reducing traffic at smaller ports, especially in the South. Consequently, businesses and farmers relying on these ports may become less competitive in the global marketplace, negatively impacting workers and local economies that depend on port-generated business, including small businesses, warehouses, and logistics carriers.

American farmers may be most impacted. Farmers will pay more for fertilizer and other critical inputs, while commodities like wheat, corn, and soy will be more expensive to sell profitably. When competing globally for customers with very tight profit margins, USTR’s fees may be the last straw for remaining cost-competitive.

Bottom Line: Since 1999, China’s shipbuilding sector went from producing less than 5% of global tonnage to over 50% by 2023. While there is good reason to investigate accusations of China unfairly seeking to dominate the ocean shipping industry, there’s broad concern in U.S. industry and agriculture that USTR’s proposal fails to offer real and effective remedies. Instead, it retroactively punishes ocean carriers and U.S. businesses for utilizing today’s existing fleet without doing anything to materially address the issue at the heart of this investigation: stimulating the building of new ships within the U.S.

In charting a course forward, the U.S. government must ensure its actions don’t inadvertently punish American businesses, farmers, and consumers. Addressing this challenge requires a dedicated strategy, sustained investments, partnerships with allied nations like Japan and South Korea that already have strong shipbuilding industries, strong leadership, and a long-term commitment from both the public and private sectors.

How the Chamber is Taking Action to Oppose These Proposals 

  • Read our comments to USTR outlining our opposition and the impact of the proposed actions on industry sectors and everyday Americans.  
  • Read the coalition letter submitted to USTR by the Chamber and 300+ trade associations.  
  • Read our comments submitted last year on USTR’s investigation. 

About the authors

John Drake

John Drake

John Drake is responsible for representing the business community on transportation, infrastructure, and supply chain issues before Congress, the administration, the media, the business community, and other stakeholders.

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