Updated framework for Chinese-built vessels calling U.S. ports

The U.S. Trade Representative (USTR) announced on 17 April its plan to impose fees on ships built in China and operated by Chinese companies that dock at U.S. ports. Swedish Club’s update provides detailed clarification on the fee application mechanism, applicable caps, and confirmed vessel exemptions. 

U.S. port fees on Chinese-built vessels: Application, limitations, and exemptions

Under Annex II of the USTR framework, service fees for Chinese-built vessels are assessed once per rotation, defined as a string of consecutive U.S. port calls following a foreign departure.

• The first U.S. port of call after arrival from abroad triggers the fee.
• Additional U.S. port calls during the same coastwise rotation are not subject to further fees.
• This structure is intended to avoid cumulative fees for multi-port U.S. voyages inbound from foreign origins.

Annual Cap – Maximum of five fees per vessel

Each vessel is subject to a maximum of five (5) fee assessments per calendar year, regardless of the number of qualifying U.S. entries.

• Once five qualifying entries have occurred, no further fees apply for that vessel until the next calendar year.
• Operators are responsible for tracking entry counts and verifying compliance with this cap.

Exemptions from Chinese-built vessel fee

The following vessel types and operations are explicitly excluded from the Chinese-built vessel fee regime:

• U.S.-flagged or U.S.-owned vessels enrolled in:
  • Maritime Security Program (MSP)
  • Tanker Security Program (TSP)
  • Cable Security Program
  • Voluntary Intermodal Sealift Agreement (VISA)

• Vessels arriving in ballast
• Small vessels, defined as:
  • Containerships ≤ 4,000 TEU
  • General cargo ships ≤ 55,000 DWT
  • Bulk carriers ≤ 80,000 DWT

• Short-sea shipping vessels arriving from a foreign port less than 2,000 nautical miles away
• U.S.-owned vessels, where ≥75% of beneficial ownership and control lies with U.S. persons
• Specialized export vessels: specifically, “special purpose-built vessels for the transport of chemical substances in bulk liquid forms”
• Lakers: vessels identified as “Lakers Vessels” on CBP Form 1300 or its electronic equivalent

Operators must be prepared to document eligibility for these exclusions through vessel particulars, registration status, and CBP declarations.

Suspension of fees – U.S.-built vessel order mechanism

To incentivise U.S. shipbuilding, the USTR permits a temporary suspension of the fee for a specific Chinese-built vessel, subject to the following conditions:

• The vessel owner must order and take delivery of a U.S.-built vessel of equivalent or greater net tonnage.
• The fee is suspended for up to three (3) years from the date of order.
• If the U.S.-built vessel is not delivered within the three-year window, all deferred fees for the Chinese-built vessel become immediately payable.
• Operators must retain and produce documentary proof of order and delivery status upon request (e.g. construction contracts, builder’s certificates).

“U.S.-built” is tightly defined and includes criteria on documentation, hull/superstructure manufacturing origin, and listed critical components. See full Annex II definition for compliance assurance.

For further detail, operators are advised to consult Annex II of the USTR April 17, 2025 Notice of Action and Proposed Action in Section 301 Investigation.