The proposal stems from a trade investigation launched during the Biden administration, which concluded that China unfairly dominates the maritime, logistics and shipbuilding sectors.

The Trump administration has unveiled a new proposal to impose tariffs on Chinese commercial vessels as part of a strategy to reduce the Asian country’s maritime dominance. The Office of the U.S. Trade Representative (USTR) announced the plan, which includes tariffs on Chinese-built vessels and mandates that would require a percentage of U.S. products to be transported on U.S.-flagged vessels.

According to the report, China’s control over these industries has grown alarmingly: its share of global shipbuilding capacity rose from less than 5% in 1999 to more than 50% in 2023. It also controls 95% of global container production and owns 19% of the global commercial fleet.

The USTR argues that this dominance is based on artificially low labor costs, forced technology transfer, and practices that eliminate competition. The proposal therefore calls for tariffs of up to $1.5 million for each call by a Chinese-built vessel to a U.S. port. These tariffs would apply not only to Chinese-owned vessels, but also to any operator with Chinese-made ships.

Economic and Commercial Impact

While the proposal seeks to strengthen the U.S. shipbuilding industry, the additional costs could translate into higher prices for American consumers.

There is also uncertainty about whether these measures would be enough to revive US shipbuilding capacity, given that the country currently ranks 19th in the world, with fewer than 5 commercial ships built annually. By comparison, China produces more than 1,700 ships each year.

The proposal also calls for at least 1% of U.S. seaborne exports to be transported on U.S.-flagged and operated vessels initially. This requirement would be progressively increased to 15% over seven years, including a requirement that the vessels be built in the U.S.