The California Chamber of Commerce joined more than 160 other organizations on July 7 in once again urging the Office of the U.S. Trade Representative (USTR) to refrain from imposing proposed actions against China that will hurt U.S. businesses and consumers instead of deterring China’s broader maritime ambitions.
The letter was in response to the USTR’s latest proposed action following its Section 301 investigation of China’s targeting the maritime, logistics and shipbuilding sectors for dominance.
The organizations signing the letter represent a wide breadth of the nation’s economy, including importers, exporters, farmers and agribusinesses, retailers, manufacturers, energy providers, wholesalers, transportation and logistics providers, and other sectors.
The USTR changed its proposal following hearings held earlier this year. Still, the final proposal retains the port fees that the coalition asserts will be passed along directly to cargo owners, U.S. importers and exporters.
The coalition reiterated its support for scrutinizing China’s efforts to dominate the maritime industry but emphasized again that the USTR’s final actions will not deter China’s broader maritime ambitions and will instead directly hurt American businesses and consumers.
Impact of Fees on Shipping Costs
A similar letter to the USTR on March 24, signed by 300 organizations representing an equally broad range of sectors, projected that the proposed fees will increase shipping costs, container and non-containerized, by at least 25% ($600–$800 or more), adding approximately $30 billion in annual costs on U.S. businesses and farmers.
This will lead to higher prices for U.S. consumers and undermine the competitiveness of many U.S. exports — leading to a decline in export revenues and increasing the U.S. trade deficit, contrary to the Trump administration’s America First trade goals.
The July 7 letter calls attention to a recent announcement by BIMCO, the Baltic and International Maritime Council, the world’s largest international shipping association.
BIMCO said it has begun developing a standard industry clause to address contractual uncertainties arising from USTR’s actions to impose fees on Chinese-related ships calling at U.S. ports.
A BIMCO official said the USTR’s measures, when implemented, will significantly increase the cost of seaborne trade to and from the United States.
Section 301 Investigation
At the request of the United Steelworkers and four other unions, the USTR opened an investigation in April 2024 under Section 301 of the Trade Act of 1974, as a way to rebuild the U.S. shipbuilding industry.
The USTR released its investigation results on January 16, 2025 in a 182-page report on the decline of U.S. shipbuilding and U.S. flag carriers. The report focused on the dramatic expansion of China’s shipbuilding and ship operating sectors.
The report concluded China increased its share of global shipbuilding tonnage from 5% in 1999 to more than 50% in 2023 because of massive subsidies from the Chinese government and preferential treatment for China government-owned enterprises that are squeezing out private sector international competitors.
However, a March 2025 study assessing the probable net economic effects of the proposed remedies found that overall, total exports and imports would decline, having a negative impact on the U.S. economy while the administration is striving to grow the overall economy and create jobs around the country.
The study by Trade Partnership Worldwide, LLC concluded that ocean carriers will respond to USTR’s fees by reducing service to many U.S. ports (creating bottlenecks at larger ports like Los Angeles/Long Beach) and potentially diverting cargo to ports in Canada and Mexico based upon customer demand.
The carriers’ response will reduce ocean traffic at many smaller ports (such as Oakland), creating profound economic damage — including lost jobs — in communities where ports serve as vital economic hubs.
The USTR proposed remedies include significant “port service fees” against Chinese-built ships every time they enter a U.S. port. The fee also will apply to operators who have Chinese-built vessels in their fleet or have Chinese-built vessels on order. The remedy also includes a requirement for U.S. exporters to export a certain percentage of goods on U.S.-owned, -operated and eventually built vessels.
While acknowledging that USTR is proposing export requirements to support a domestic shipbuilding industry, the coalition emphasized that all 300-plus organizations signing the March 24 letter share the goal of finding real remedies to address China’s dominance in the maritime industry, while also revitalizing the U.S. shipbuilding industry.
March Public Hearings
USTR held public hearings on March 24 and March 26 about the proposed actions in the Section 301 investigation on China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance.
There was a mix of support and opposition to the proposed remedies, which will result in fees ranging from $1 million to $3 million — even as high as $3.5 million per port call. Unions and steel makers were supportive of the remedies, while carriers, shippers and farm exporters were strongly opposed. Some 400 comments were submitted and more than 30 witnesses spoke.
All agreed that China’s dominance of the shipping industry should be addressed as the United States has lost more than 70,000 jobs in the last few decades and now ranks 19th globally in shipbuilding. Further, while China builds more than 1,000 ocean vessels for commercial use per year, the United States produces fewer than 10.
After the hearings, the USTR developed its final proposal.
What’s Next
The coalition letter predicts that ocean carriers will rearrange and potentially reduce services to U.S. ports, especially smaller ports, as a result of the port fee. The reduced service will increase congestion across the country’s logistics network and spur a new normal of higher costs and delays affecting both imports and exports. This will have a negative impact on local economies, businesses and workers who rely on these ports.
The July 7 letter again calls upon USTR and the administration to evaluate what is truly needed to support the revitalization of the domestic shipbuilding industry. Achieving that goal requires a dedicated strategy with sustained investments, leadership and a long-term commitment from both the public and private sectors. Not needed is a port fee on Chinese-built vessels that were purchased years ago.
