BEIJING/LOS ANGELES: In a sharp escalation of tensions, the United States and China have both started slapping new port fees on ships linked to each other’s countries—marking a dramatic twist in their ongoing trade war and dragging the global shipping industry into the fray.
The new charges, announced on Tuesday (Oct 14), apply to a wide range of cargo—from holiday merchandise to crude oil—pushing maritime trade into the spotlight of geopolitical rivalry. Both sides had hinted at possible dialogue just days ago, but the latest moves show they’re not backing down.
A maritime standoff unfolds
China’s Ministry of Transport said it’s now collecting fees on vessels that are US-owned, operated, built, or flagged. However, Chinese-built ships and empty vessels coming in for repairs are exempt, giving local shipbuilders a strategic edge.
At the same time, the US has begun enforcing similar fees on Chinese-linked vessels, part of a broader push to reduce China’s influence in global logistics and boost the struggling American shipbuilding sector.
Both countries are charging these fees at the first port where the vessels arrive, either per trip or for a set number of trips per year.
“This tit-for-tat approach is locking both countries into a cycle of maritime taxation that could seriously disrupt global shipping routes,” said Xclusiv Shipbrokers, a Greece-based maritime research firm.
Shipping industry feels the pressure
The fallout is already hitting the shipping industry hard. Experts say Chinese giant COSCO Shipping could be particularly affected by US fees, potentially taking on nearly half of the projected US$3.2 billion (S$4.37 billion) in container sector losses by 2026.
Meanwhile, European shipping companies like Maersk, Hapag-Lloyd, and CMA CGM are moving quickly to avoid trouble, rerouting vessels to dodge the affected ports.
There’s a lot of disruption right now, according to Ed Finley-Richardson, an independent analyst focused on dry bulk shipping. Some US shipowners are even trying to shift cargo mid-route to avoid the fees—sometimes it works, sometimes it doesn’t.
The US has provided a bit of breathing room, allowing delayed fee payments for companies with long-term charters of Chinese vessels carrying liquefied petroleum gas (LPG) and ethane. That grace period ends on Dec 10.
Trade tensions go beyond cargo
China has slapped port fees and sanctions on five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, accusing them of helping a US investigation into China’s trade practices. Hanwha owns Philly Shipyard and builds US-flagged LNG carriers.
In addition, China has launched its own investigation into how the US probe is impacting its shipping and shipbuilding sectors.
Climate policy becomes a new battleground
To complicate things further, the US has warned that countries supporting a U.N.-backed plan to cut emissions from ships—an initiative China supports—could face sanctions or even be blocked from American ports. It’s a sign that environmental policy is also becoming a weapon in this trade standoff.
The fact that both trade and climate policy are being used this way shows how shipping is no longer just a neutral part of global trade—it’s now a tool of national strategy, according to Xclusiv Shipbrokers.
What comes next?
Despite the growing tension, both sides say they’re still open to talks. China’s Commerce Ministry stated that if the US chooses confrontation, China will see it through to the end, but if it chooses dialogue, China’s door remains open.
For now, though, uncertainty hangs over shipping lanes and global supply chains. New data shows that 45 LPG-carrying vessels—about 11% of the global fleet—could be affected by China’s new fees. Analysts also estimate that 13% of crude tankers and 11% of container ships globally may be caught in the crossfire.
In an effort to calm nervous investors, COSCO announced a $210 million share buyback, which briefly boosted its stock by 2% on Tuesday.
As the US and China dig in, global shipping lanes—once thought to be neutral highways of commerce—are quickly becoming front lines in a larger economic conflict.
