The U.S. Trade Representative (USTR) has officially implemented the Section 301 action against China's maritime sector dominance, with several key modifications from the initially proposed framework. These changes are expected to significantly impact global shipping operations, warranting immediate attention from supply chain leaders.
Key Fee Structure Changes
Rather than applying a flat fee per vessel entry as initially proposed, the USTR has adopted a tiered, progressive fee structure with several important adjustments:
- Delayed Implementation Timeline: All fees are set at $0 for the first 180 days (until October 14, 2025), providing companies with critical preparation time.
- Graduated Fee Increases: Following the grace period, fees will increase annually over three years rather than taking immediate full effect.
- Fee Assessment Basis: Instead of assessing fees at each port call, fees will be applied per rotation or string of U.S. port calls, capped at five times annually per vessel.
- Dual-Target Approach: Fees target both Chinese operators/owners and operators using Chinese-built vessels, applying the higher of net tonnage or per-container calculations.
- Notable Exclusions: Key exemptions now include vessels below certain size thresholds (4,000 TEU), vessels on short-sea shipping routes (under 2,000 nautical miles), and vessels carrying U.S. government cargo.
The following tables illustrate the detailed fee structure that will be implemented under the finalized Section 301 action:
Table 1: Fee structure for Chinese vessel operators and owners
Table 2: Fee structure for vessel operators of Chinese-built vessels
Strategic Industry Impact
The finalized action creates complex competitive implications throughout the maritime value chain:
For carriers with high Chinese vessel exposure, like COSCO (52.19% Chinese-built), the impact will be most severe. Even carriers with more diverse fleets like Maersk (27.68% Chinese-built) and CMA CGM (35.91% Chinese-built) face significant financial exposure.
The following chart (Fig.1) illustrates the relative exposure of major global carriers to Section 301 maritime fees, based on the share of Chinese-built vessels in their fleets. Carriers with a higher percentage of Chinese-built ships — particularly Chinese operators like COSCO — face the most substantial cost impacts, while even non-Chinese carriers with significant Chinese-built tonnage, such as Maersk and CMA CGM, encounter meaningful exposure under the new fee regime.
Figure 1: Major carriers' exposure to Section 301 fees based on percentage of Chinese-built vessels in their fleets
The financial implications will vary significantly depending on vessel characteristics:
- For a typical 15,000 TEU vessel operated by a Chinese carrier like COSCO, the fee could reach $7.5 million per rotation by October 2025, escalating to $21 million by April 2028.
- For non-Chinese operators using Chinese-built vessels, the same ship would face fees of approximately $2.7 million (by net tonnage) or $1.8 million (by container) in October 2025, increasing to $4.95 million (by container) or $3.75 million (by net tonnage) by April 2028.
Industry Reactions
The World Shipping Council (WSC) has expressed serious concerns about the fee regime, warning that it could harm American trade without delivering meaningful progress toward revitalizing U.S. shipbuilding. According to the WSC:
- The net tonnage-based fees will penalize larger, more efficient vessels that deliver essential goods, including components used in U.S. production lines.
- Applying fees to vessels already in service offers no support for U.S. shipbuilding while potentially harming American exporters, particularly farmers.
- The WSC has questioned whether the fees exceed the authority granted under U.S. trade law.
The World Shipping Council has provided a detailed impact analysis of the fee regime, with projections of per-rotation costs across different vessel types:
Figure 2: WSC estimated impact of Section 301 fees on Chinese vessel operators and vessel owners of China for selected net tonnage (per voyage)
Fig.2 illustrates the estimated impact of Section 301 fees specifically on Chinese vessel operators and owners across different net tonnage categories from 2025 to 2028. For vessels with 75,000 net tonnage, the fees start at approximately $3.75 million per rotation in 2025 and escalate dramatically to over $10 million by 2028.
Figure 3: WSC estimated impact of Section 301 fees on vessel operators of Chinese-built vessels for selected net tonnage (per voyage)
Fig. 3 illustrates the estimated per-voyage impact of Section 301 fees on operators of vessels built in China, segmented by net tonnage categories (25,000, 50,000, and 75,000). For a 25,000 NT vessel, fees begin at approximately $450 thousand per rotation in October 2025 and escalate to $825 thousand by 2028. Similarly, vessels of 50,000 and 75,000 NT face proportionally higher fees, reaching $1.650 million and $2.475 million per voyage, respectively, by April 2028. The figure highlights the financial burden scaling with vessel size over the three-year phase-in.
Figures 2 and 3 together reveal the significant difference in financial burden between Chinese vessel operators/owners and operators of Chinese-built vessels. While both groups face escalating costs under the Section 301 action, fees for Chinese vessel operators and owners (Fig. 2) are substantially higher across all net tonnage categories compared to those faced by operators of Chinese-built vessels (Fig. 3). For example, by 2028, a 75,000 NT Chinese-owned vessel would incur fees exceeding $10 million per voyage, while a similarly sized Chinese-built (but non-Chinese operated) vessel would face a maximum fee of approximately $2.475 million. This disparity underscores the dual-targeted nature of the policy, with a primary focus on penalizing Chinese ownership and operation rather than merely the origin of vessel construction.
Shipping analyst Lars Jensen notes that carriers are more likely to redirect orders to Korean or Japanese shipyards rather than U.S. facilities, as the price differential remains prohibitive. With China building roughly 51% of global tonnage and Korea/Japan building 43%, Jensen suggests the action may simply redirect orders without achieving the goal of revitalizing U.S. shipbuilding.
This assessment aligns with VesselBot CEO C. Komodromos's earlier prediction that "some companies may consider shifting new shipbuilding projects to alternative countries like South Korea. However, due to the long cycles of shipbuilding, this change will not appear in the market for the next few years and, as a result, may not benefit carriers."
Additional Actions
Beyond the vessel fees, the USTR has also proposed:
- Tariffs on Port Equipment: Additional duties of up to 100% on Chinese-made ship-to-shore gantry cranes and 20-100% on containers and chassis.
- LNG Export Requirements: A graduated requirement for U.S. LNG exports to be transported on U.S.-flagged vessels, starting at 1% after three years and increasing to 15% over a 22-year period.
Looking Forward
While the finalized Section 301 actions provide more clarity than the initial proposals, they still represent a significant disruption to established maritime shipping patterns. The extended implementation timeline offers stakeholders a window to adapt, but the long-term strategic implications remain complex and far-reaching.
VesselBot continues to monitor these developments, providing data-driven analysis as this situation evolves. Our modeling capabilities allow us to quantify potential impacts at the vessel, carrier, and trade lane level, enabling decision-makers to evaluate different scenarios and develop informed strategies. By leveraging these insights, supply chain leaders can mitigate risks, identify opportunities, and maintain resilience in this changing regulatory landscape.