Washington Moves to Curb China’s Dominance in Global Shipping
LONDON, March 6 – The United States is preparing to levy new fees on Chinese-built and Chinese-flagged vessels docking at its ports as part of a broader effort to revive domestic shipbuilding and counter China’s expanding influence in the global maritime industry. According to a draft executive order, the Biden administration will also pressure U.S. allies and partners to enact similar restrictions or face economic retaliation.
This policy shift represents one of the most significant efforts in decades to reduce American dependence on Chinese-built ships while reinforcing U.S. national security interests in the maritime and logistics sectors. The measure comes amid growing bipartisan concerns over China’s dominance in global shipbuilding, which now accounts for more than 50% of all merchant vessel cargo capacity—a sharp increase from just 5% in 1999.
Highlights from the Draft Executive Order
- New port fees on vessels linked to China-built or China-flagged fleets.
- U.S. to encourage allies to implement similar policies or risk economic retaliation.
- Major shipping companies, including COSCO, MSC, and Maersk, could face higher costs under this regulation.
- The U.S. will increase tariffs on Chinese-made cargo-handling equipment.
- The plan aims to boost domestic shipbuilding and weaken China’s control over global maritime trade.
Strategic Shift: U.S. Targets China’s Maritime Supremacy
China has built a commanding position in the global shipping industry, largely at the expense of Japan and South Korea, which once dominated shipbuilding. The United States, once a significant player in maritime construction, has seen its shipbuilding capacity decline dramatically since the 1970s, leaving it reliant on foreign-built vessels for both commercial and military logistics.
The draft executive order, dated February 27, proposes that fees should be imposed on any vessel entering a U.S. port if that vessel belongs to a fleet that includes China-built or China-flagged ships. This approach ensures that global shipping companies operating Chinese-built vessels cannot simply reroute their ships to avoid the fees.
According to industry analysts, this could lead to higher operational costs for shipping giants such as Switzerland’s MSC, Denmark’s Maersk, and Taiwan’s Evergreen Marine, who rely heavily on China for ship construction.
Possible Global Repercussions and Industry Pushback
The world’s largest container shipping line, MSC, has already hinted at reducing its U.S. port visits to minimize exposure to these new costs. Soren Toft, CEO of MSC, stated earlier this week that the company is evaluating ways to adapt to these regulatory changes.
The potential economic retaliation mentioned in the executive order could also create tensions with European and Asian allies, many of whom rely on Chinese shipyards for vessel production and logistics support.
French shipping giant CMA CGM has already responded by announcing plans to triple its fleet of U.S.-flagged vessels from 10 to 30 over the next four years. This move indicates that some companies may seek workarounds to avoid the new tariffs and port fees while maintaining their market access in the U.S.
National Security and Economic Justifications
The draft order explicitly states that China’s “unfair trade practices in the maritime, logistics, and shipbuilding sectors” pose a direct threat to U.S. national security and economic prosperity.
Among the proposed measures:
- Tariffs on Chinese cargo-handling equipment to reduce reliance on China-built cranes and port infrastructure.
- Incentives for American shipbuilders to revitalize domestic ship production.
- Restrictions aimed at reducing the U.S. dependence on Chinese maritime logistics networks.
Potential Chinese Retaliation and Diplomatic Fallout
China has yet to formally respond to the proposed policy, but experts predict Beijing may retaliate by imposing its own port fees or trade restrictions on U.S. shipping companies operating in Chinese ports. Given China’s control over key global supply chain hubs, a full-scale trade dispute in the maritime sector could lead to higher costs for importers and exporters worldwide.
Broader Geopolitical Implications
This latest move aligns with the U.S. strategy to challenge China’s economic influence in critical industries such as semiconductors, artificial intelligence, and green energy. By targeting maritime trade, the U.S. is sending a clear signal that it intends to limit China’s reach in global commerce.
The executive order also puts pressure on European nations and Asian allies like Japan and South Korea to curb their reliance on Chinese shipbuilders. Should they refuse, they could face economic penalties from Washington, further escalating geopolitical tensions.
Looking Ahead: The Future of U.S. Maritime Policy
As the U.S. pursues an aggressive maritime strategy, several key questions remain:
- Will major shipping lines adapt or challenge the new fees in court?
- How will China respond, and could this spark a global trade war in the shipping sector?
- Will allies comply with U.S. demands, or will they seek alternative strategies?
The Biden administration is expected to finalize and implement the executive order in the coming months, potentially reshaping the global maritime industry for years to come. In the meantime, shipping companies, global retailers, and policymakers will closely monitor how this latest U.S.-China economic conflict unfolds.
