USTR announces significant fees on Chinese and other vessels

On April 17, the Office of the United States Trade Representative’s (USTR) released its Notice of Action and Proposed Action in Section 301 Investigation of China’s Targeting the Maritime, Logistics and Shipbuilding Sectors for Dominance, Request for Comments (the Notice). The Notice:

• imposes a service fee for Chinese owned or operated vessels (as defined by various control and ownership criteria) entering US ports, starting at US$50.00 per net ton in October 2025 and increasing annually every April to US$140.00 by April 2028, to be paid by vessel operators; 
• imposes a service fee for Chinese-built vessels (subject to certain exemptions) entering US ports, determined on the basis of vessel tonnage or containers discharged (whichever fee is greater) starting at US$18.00 per net tonnage or US$120.00 per container in October 2025 and increasing annually every April to US$33.00 per net tonnage or US$250.00 per container by April 2028, to be paid by vessel owners;
• imposes a service fee for foreign-built vehicle carriers entering US ports (subject to certain exemptions), to be set at US$150.00 per Car Equivalent Unit in October 2025 and to be paid by vessel operators;
• imposes requirements for the percentage of US liquefied natural gas (LNG) exports which must be exported using US LNG vessels, starting at 1 percent on US-flagged vessels in April 2028 and then gradually increasing to 15 percent on US-built, US-flagged and US-operated vessels by April 2047, with failure to meet such goals resulting in potential LNG export license suspensions; and
• proposes tariffs on Chinese ship-to-shore cranes and other cargo moving equipment made in China (as defined by in the Notice), consisting of duties of 100 percent on applicable containers, chassis, chassis parts and ship-to-shore cranes.

Procedural background

The Notice responds to the findings of the USTR’s Section 301 Investigation of China’s Targeting of the Maritime, Logistics and Shipbuilding Sectors for Dominance.¹ Section 301 grants the USTR the authority to investigate and remediate certain foreign trade practices. In February 2025, the USTR published its Proposed Action in Section 301 Investigation of China’s Targeting of the Maritime, Logistics and Shipbuilding Sectors for Dominance (the Initial Proposal), which proposed, among other things, levying significant port fees on Chinese vessels. Following this, the USTR accepted public comments on the proposal, with public hearings concluding March 26. On April 9, 2025, the White House issued Executive Order 14269, “Restoring America’s Maritime Dominance” (the Order). Among other things, the Order instructed the USTR to consider additional tariffs against Chinese-built cargo handling equipment, including ship-to-shore cranes.

The Notice consists of both the USTR’s final determinations on the Initial Proposal as well as new proposed actions in response to the Order. The comment period for the new proposal opened on April 17, 2025. Requests to appear at a hearing on the new proposal should be submitted by May 8, 2025 and written comments should be submitted by May 19, 2025. Comments may be submitted for up to seven days after the last day of the public hearings.

Structure of the Notice

The Notice includes four annexes consisting of three service fees and one set of vessel requirements. The Notice provides that a vessel will only be subject to “(a) one of the three fees directed under Annex I, II or III; or (b) a requirement under Annex IV.” As such, a vessel may be subject to one or more of the annexes, but will only ever be subject to one of the penalties provided in Annex I-IV.

In determining which of the annexes apply, the Notice provides the following rules:

1. A vessel that is specially designed for the international maritime transport of LNG, is subject to Annex IV. A vessel subject to Annex IV is not subject to the fees in Annexes I, II or III.
2. A vessel properly identified as a “Vehicle Carrier” on US Customs and Border Protection Form 1300, or its electronic equivalent, will be subject to Annex III.
3. A vessel that meets the conditions of Annex I, for example, a vessel operated by a Chinese entity or owned by a Chinese entity, will be subject to the fee imposed under Annex I.
4. A vessel may be subject to Annex II when Annex I and Annex III do not apply.

Annex I: Service fee on Chinese vessel operators and vessel owners of China

To which vessels is Annex I applicable?

Annex I applies service fees to Chinese owned and operated vessels.² For purposes of determining applicability of the fee, a vessel’s owner and operator are the entities identified as such in the Vessel Entrance or Clearance Statement (Form 1300) filed with US Customs and Border Protection (CBP).To evaluate whether the owner oroperator listed on Form 1300 qualifies as being Chinese, the Notice draws on concepts of legal title, beneficial ownership and effective control. Specifically, a vessel will be considered to have a Chinese owner and/or operator, which generally includes the People’s Republic of China, Hong Kong and Macau for the purposes of Annex I, if the vessel’s owner or operator:

• has its headquarters or parent company with its headquarters or principal place of business in China;
• is owned or controlled by a Chinese citizen;
• is under the control, ownership or jurisdiction of China, including because it:
  • is a Chinese citizen or resident;
  • is organized under Chinese law;
  • is has its principal place of business in China;
  • has 25 percent or more of its voting interest, board seats or equity interest is owned by such entities or a Chinese government directly;
• is owned or controlled by a an entity listed as a Chinese Military Company pursuant to Section 1260H of Public Law 116-283;
• is an ocean common carrier, as defined in 46 U.S.C. § 40102(7), which is itself or has a board which is either majority owned or controlled by the PRC.

What vessels are exempt from the Annex I service fee?

LNG vessels subject to Annex IV and car carriers subject to Annex III are exempt.

Who is responsible for paying the Annex I service fee?

The vessel’s operator must calculate, report and pay the Annex I service fee, as well as provide any requested supporting documentation, through existing government methods specified by CBP prior to the entry of the vessel into a US port on a particular string. However, the Annex I service fee will only be charged at the first port of call within a string of US port calls and will only be charged a maximum of five times per year, per vessel. Though the operator initially pays the fee, the operator may seek reimbursement from contractual counterparties.

What is the Annex I service fee?

The Annex I service fee will be set at the following rates on the following dates:

Annex II: Service fee on vessel operators of Chinese-built vessels

To which vessels is Annex II applicable?

To any Chinese-built vessel that is not exempt. A vessel is considered a Chinese-built vessel under Annex II if it was built in the PRC, consistent with the definition of “place of build” in CBP and US Coast Guard (USCG) regulations and would be so identified on the Form 1300.

What vessels are exempt from the Annex II service fee?

Annex II only applies to Chinese-built vessels that are not Chinese owned/operated (Annex I), vehicle carriers (Annex III) or LNG carriers (Annex IV). Further, the following Chinese-built vessels are exempt from the Annex II fee:

1. US-owned or US-flagged vessels enrolled in, either:
   1. the Voluntary Intermodal Sealift Agreement;
   2. the Maritime Security Program;
   3. the Tanker Security Program; or
   4. the Cable Security Program;
2. vessels arriving empty or in ballast;
3. vessels with a capacity of equal to or less than:
   1. 4,000 Twenty-Foot Equivalent Units;
   2. 55,000 deadweight tons, or
   3. an individual bulk capacity of 80,000 deadweight tons;
4. vessels entering a US port in the continental US from a voyage of less than 2,000 nautical miles from a foreign port or point;
5. US-owned vessels, where the US entity owning the vessel is controlled by US persons and is at least 75 percent beneficially owned by US persons;
6. specialized or special purpose-built vessels for the transport of chemical substances in bulk liquid forms; and
7. vessels principally identified as “Lakers Vessels” on CBP Form 1300, or its electronic equivalent.

Additionally, CBP will suspend the applicable fee for a particular vessel for up to three years if the vessel owner orders and takes delivery of a US-built vessel (as defined by the Annex) of equivalent or greater net tonnage relative to the vessel which would be subject to the Annex II fee.³

Who is responsible for paying the Annex II service fee?

The vessel owner is responsible for paying any applicable fee through existing government methods specified by CBP. However, the Annex II service fee will only be charged up to five times per year, per vessel. The vessel owner may seek reimbursement from contractual counterparties including charterers and cargo interests.

What is the Annex II service fee?

The applicable Annex II service fee charged to the vessel owner will be the greater of the fee determined by the (i) tonnage of cargo discharge or (ii) fee per container.

The Annex II service fee will be set at the following rates per net ton of cargo for the arriving vessel. on the following dates:

The Annex II service fee will be set at the following rates per discharged container of the arriving vessel on the following dates:

Annex III: Service fee on vessel operators of foreign-built vehicle carriers.

To which vessels is Annex III applicable?

Annex III applies service fees to foreign-built vehicle carriers. For the purposes of Annex III, a vehicle carrier is a vessel which is principally identified as a “Vehicle Carrier” on Form 1300. A foreign-built vessel is any vessel which is not a US-built vessel, as defined in Annex III.⁴

What vessels are exempt from the Annex III service fee?

CBP will suspend the Annex III service fee for up to three years if the vessel owner orders and takes delivery of a US-built vessel of equivalent or greater Car Equivalent Unit (CEU) relative to the vessel which would be subject to the Annex III fee.

Who is responsible for paying the Annex III service fee?

The vessel operator must calculate, report and pay the Annex III service fee through existing government methods specified by CBP and provide any requested supporting documentation. The operator may seek reimbursement for the fee from contractual counterparties.

What is the Annex III service fee?

The Annex III service fee will be set at the following rates for the following dates:

Annex IV: Restriction on certain maritime transport services

To which vessels is Annex IV applicable?

Annex IV sets restrictions on the percentage of LNG which must be exported using qualified US-built vessels. The restrictions come into effect after three years on April 17, 2028. USTR plans to consult with the Department of Energy (DOE) and other agencies to provide industry additional notice and technical information regarding this restriction. Commencing on April 17, 2028, 1 percent of US vessel-borne LNG exports must be shipped on US-flagged and US-operated (but not US-built) vessels. Commencing on April 17, 2029, 1 percent of US vessel-borne LNG exports must be shipped on US-built, US-flagged and US-operated vessels. That number gradually increase to 15 percent by April 17, 2047.

What vessels are exempt from Annex IV?

CBP will suspend the applicable fee for up to three years if the vessel owner orders and takes delivery of a US-built vessel of equivalent or greater LNG capacity, measured in cubic feet, relative to the vessel which would be subject to the Annex IV penalty.

Who is responsible for Annex IV penalties?

Beginning in the third year (April 16, 2028), LNG terminals must report to the DOE the LNG shipments, and percentage of LNG shipped, on US-flagged, US-built and US-operated vessels. If the targets of Annex IV are not met, then USTR may direct the suspension of LNG export licenses.

What is the Annex IV export restrictions?

Under Annex IV, the percentage of LNG which must be exported by US-built vessel by each date is as follows: