U.S. Counters China’s Shipbuilding Dominance with Section 301 Action
Trade Update • April 17, 2025
he Office of the United States Trade Representative (USTR) today announced decisive measures under Section 301 of the Trade Act of 1974 to counter China’s systematic targeting of the maritime, logistics, and shipbuilding sectors. The action follows a year-long investigation into China’s state-driven strategy, which USTR has determined to be unreasonable and damaging to U.S. commerce.
Phase-Based Response Measures
USTR’s responsive actions will roll out in two major phases:
Phase 1 – Begins After 180 Days
During the first 180 days, applicable fees will be set at $0 to allow time for adjustment. Afterward, the following will apply:
Fees on vessel owners/operators of China-based ships, based on net tonnage per U.S. voyage, increasing incrementally over time.
Fees on operators of Chinese-built ships, also based on net tonnage or container count, with gradual escalation.
Incentives for U.S.-built car carriers via fees on foreign-built car carrier vessels, calculated on vessel capacity.
Phase 2 – Begins in 3 Years
To promote domestic LNG vessel construction:
Restrictions on transporting LNG via foreign vessels, phased in incrementally over 22 years to encourage the use of U.S.-built LNG carriers.
USTR is also seeking public comments on proposed tariffs for ship-to-shore cranes and other cargo handling equipment, aligning with the President’s Maritime Executive Order.
Deadline to request appearance at the hearing: May 8, 2025
Background on the Investigation
Under Section 301 of the Trade Act, USTR may investigate foreign acts, policies, or practices that burden or restrict U.S. commerce. This authority was invoked on March 12, 2024, when five major labor unions petitioned USTR to examine China’s practices:
United Steelworkers (USW)
International Association of Machinists and Aerospace Workers (IAM)
International Brotherhood of Boilermakers (IBB)
International Brotherhood of Electrical Workers (IBEW)
Maritime Trades Department (MTD), AFL-CIO
Following the petition, USTR launched an investigation and requested consultations with China on April 17, 2024. Nearly 600 public comments were received, and USTR held a two-day public hearing to assess stakeholder views.
Key Findings
The investigation concluded that China’s state-directed policies are both unreasonable and restrictive to U.S. commerce, with findings including:
Displacement of foreign firms and erosion of commercial opportunities for U.S. businesses and workers.
Overdependence on China, creating vulnerabilities in U.S. supply chains and reducing competitive choice.
Suppressed investment in the U.S. shipbuilding sector, undermining economic and national security.
The policies were deemed actionable under Sections 301(b) and 304(a) of the Trade Act.
“Ships and shipping are vital to American economic security and the free flow of commerce,” said U.S. Trade Representative Ambassador Greer. “These actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.”
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