USTR Changes Course Again on China Ship Fees

The Office of the United States Trade Representative (USTR) has issued a formal notice proposing targeted modifications to the trade measures announced under the Section 301 investigation into China’s targeting of the maritime, logistics, and shipbuilding sectors.

The revisions are outlined in a Federal Register notice (Billing Code 3390-F4) released June 6, 2025, and seek public comment through July 7, 2025.

The proposed changes adjust the previously announced service fees and licensing restrictions, addressing concerns about enforcability and impact on domestic industry.

Background

The USTR initiated the Section 301 investigation on April 17, 2024, concluding in a January 2025 report that China has for decades pursued industrial dominance in maritime industries through coercive policies and state subsidies. In response, USTR announced a phased action plan on April 17, 2025, including new service fees on vessels and restrictions on liquefied natural gas (LNG) exports involving non-U.S.-built ships.

Proposed Modifications

Annex III – Vessel Fees

• Fee Calculation Adjustment: USTR proposes shifting the basis for service fees from Car Equivalent Units (CEUs) to net tonnage, citing administrability and enforcement considerations.
• Targeted Coverage Exemptions: Vessels enrolled in the Maritime Security Program (MSP) and U.S. government vessels or those carrying U.S. government cargo would be exempt from these fees.
• Fee Implementation Schedule: The revised fee schedule maintains a $0 fee through October 13, 2025, rising to $14 per net ton thereafter for foreign-built vehicle carriers.

Annex IV – LNG Export Licensing

• Removal of Export License Suspension Clause: USTR proposes eliminating paragraph (j) of Annex IV, which authorized suspension of LNG export licenses if certain U.S.-build requirements were unmet. The change would apply retroactively to April 17, 2025, and is intended to address concerns from U.S. LNG exporters.
• Data Reporting Expansion: USTR seeks comment on applying LNG shipping data reporting requirements (paragraph (k)) to vessel owners or operators, rather than limiting the obligation to LNG terminal operators.

Legal Basis / Public Engagement

Under Section 307 of the Trade Act of 1974, USTR may modify actions taken under Section 301 if they are no longer deemed “appropriate.” The proposed changes are designed to ensure the action continues to support U.S. interests, reduce economic dependencies on China, and align with broader national security objectives under Executive Order 14269.

Public comments on the proposed modifications must be submitted to the electronic docket (USTR-2025-0013) via https://comments.ustr.gov/s/ by July 7, 2025.

For further information, contact Megan Grimball or Philip Butler, Co-Chairs of the Section 301 Committee, at (202) 395-5725.

Additional Context

The USTR’s April 17 determination includes a phased implementation structure, with service fees and restrictions escalating through 2028. The revenue generated is intended to support a Maritime Security Trust Fund and complementary programs under the Maritime Action Plan, including investment incentives for allied shipbuilders operating in the U.S.

The full investigation report and prior determinations are available at:
https://ustr.gov/sites/default/files/enforcement/301Investigations/USTRReportChinaTargetingMaritime.pdf

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Document Reference: 89 FR 29424 (Initiation); 90 FR 8089 (Determination); 90 FR 10843 (Proposed Action); 90 FR 17114 (April 17 Determination); Executive Order 14269.

Proposed Action in Section 301 Investigation of China's Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance