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President Donald Trump appears set to broaden his attack on global economic integration by imposing new multimillion-dollar fees on the Chinese container ships that bring many foreign goods to the United States' shores.
The proposed fees are intended to counter what the administration describes - echoing its predecessor - as unfair Chinese trade practices that have given Beijing a chokehold on the construction of commercial vessels.
Part of a broader White House strategy to revive U.S. shipbuilding, the levies threaten the system of oceangoing trade that has developed over the past quarter-century - and could result in a repeat of the supply chain disruptions the nation suffered during the pandemic.
By charging Chinese-owned or -built vessels each time they dock at a U.S. port, the administration hopes to discourage ocean carriers from buying more ships from China. The U.S. government would spend some of the tens of billions of dollars raised through the fees on subsidizing a commercial shipbuilding industry that has fallen into disrepair.
Generous government support, including tax incentives, would enable revitalized U.S. shipyards to fill orders that now go to facilities in China, South Korea or Japan, according to the administration. U.S. exporters also would be required to meet targets for shipping their goods on U.S.-flagged vessels, rising from almost nothing to 15 percent of the total in seven years.
But maritime specialists call hopes for a Lazarus-like revival of U.S. shipbuilding unrealistic, saying it would require decades of consistent federal support. Imposing hefty fees on Chinese ships now, before American-made alternatives exist, would only raise freight costs and snarl global supply chains, they said.
"It appears to be written by people who have absolutely no idea how the maritime supply chain works," said Lars Jensen, chief executive of Vespucci Maritime, a consultancy in Copenhagen. "The container lines will adjust and cut out the smaller ports. The consequence is going to be massive port congestion in the larger ports."
The shipbuilding initiative, which includes creation of a new White House office, represents another element in Trump's frontal assault on trade orthodoxy. Coupled with his plans for the most extensive tariffs in nearly a century, it would reorient global commerce in an "America First" direction.
U.S. Trade Representative Jamieson Greer has proposed a complex menu of fees targeting Chinese ships, scheduled to be the subject of a public hearing by his agency on Monday.
One levy applies to each port call by a Chinese ocean carrier; a second would be assessed based on the percentage of Chinese-built ships in a carrier's fleet; a third depends upon the percentage of the carrier's future orders that have been placed with Chinese shipyards.
The measures are needed "to create leverage to obtain the elimination" of Chinese maritime industry dominance, USTR says, suggesting the president may be prepared to negotiate with Beijing.
If the new port fees are imposed, the three major ocean carrier alliances, which collaborate like airline industry partnerships, would probably try to avoid the extra costs by reassigning Chinese-made container ships from U.S. routes to serve Europe, analysts said.
Some vessels that would be subject to the fees could dock at Canadian or Mexican ports rather than unload at American wharves - costing American dockworkers and truck drivers.
Smaller carriers with long-term leases to operate Chinese-made ships could face ruin, said Hans Laue, president of Gisholt Shipping in Weston, Florida. Among those affected would be regional U.S. carriers that ply the waters between South Florida and Gulf ports or Caribbean ports such as Jamaica, the Cayman Islands and the Dominican Republic.
"They have hundreds, if not thousands, of people working in the U.S., and they would be immediately wiped out," he said.
Some vessel operators already are trying to cancel contracts with some U.S. ports and delaying negotiations on new agreements "due to the uncertainty of costs associated with trading with the United States," Brett Bourgeois, executive director of the New Orleans Board of Trade, said in written comments on the USTR proposal.
Such upheaval in shipping schedules would have consequences for large and small ports. Container ships normally operate like waterborne buses, making scheduled stops at multiple ports along a coastline.
But facing fees that might reach $3.5 million for each stop, they would probably choose to unload all of their cargo in just one place, such as the Port of Los Angeles, executives said.
"You are absolutely going to disrupt the U.S. economy. You'll create covid-like congestion at places like L.A., Long Beach and New York," said Joe Kramek, president of the World Shipping Council, which represents the major ocean carriers.
Fewer vessels docking at smaller ports such as Oakland, California, would make it harder and more expensive for major U.S. exporters to ship their goods to foreign customers, and it would affect imports as well. Farmers who rely on bulk carriers to move grain and other commodities would be hit especially hard, forced to send their crops hundreds of miles overland to Southern California.
The proposed fees "will have catastrophic effects on U.S. exports," Kevin LaGraize Jr., president of Southport Agencies in Metairie, Louisiana, said in written comments submitted to USTR.
The new fees are just one element in an eight-page draft executive order, titled "Make Shipbuilding Great Again" and obtained by The Washington Post, that the administration is finalizing.
U.S. shipyards in recent years typically delivered only a handful of commercial vessels each year, while China built hundreds. The draft executive order cites an "urgent need to reinvigorate the U.S. shipbuilding and maritime industries" and proposes a comprehensive menu of government aid, including the shipping fees and tariffs on Chinese cargo-handling gear.
According to a Feb. 27 draft, the president would ask Congress to establish a dedicated funding source for new shipbuilding ventures.
"We used to make so many ships. We don't make them anymore very much, but we're going to make them very fast, very soon," Trump said in his address on March 4 to a joint session of Congress.
The White House did not respond to a request for comment about the executive order.
The focus on shipbuilding has bipartisan support - a group of labor unions filed a petition seeking government help for domestic shipmakers during the Biden administration.
In January, just days before President Joe Biden left office, his administration's USTR endorsed the unions' complaint, concluding in a 182-page investigative report that the Chinese government had used generous state financing, forced technology transfer, intellectual property theft and discrimination against foreign firms to increase its dominance of global maritime markets.
China's share of global shipbuilding orders rose from less than 5 percent in 1999 to more than 50 percent by 2023, depriving U.S. shipyards of business and creating dangerous "vulnerabilities across the U.S. economy," the report said.
China's shipbuilding supremacy also has military implications. Even as relations with Beijing deteriorated, the U.S. Navy continued to purchase tankers and dry cargo carriers from Chinese shipyards, according to a 2023 Congressional Research Service report.
In a speech Tuesday, Vice President JD Vance cited the nation's shipbuilding decline as an example of deindustrialization that "poses risks both to our national security and our workforce." Vance contrasted the industry's performance during World War II, when shipyards turned out "three ships every two days," with its current annual output of just five ships.
"Revitalizing domestic shipbuilding is not only possible but also a priority," said Michael Wessel, a Washington consultant with ties to the United Steelworkers union. "The principal contributing factor to reduced capacity has been China's nonmarket pricing of ships. Order books have dried up. We have existing yards that can do more today, and we have facilities that can be brought online."
An industry revival, however, faces numerous hurdles. U.S. shipyards today have little presence in the commercial market, concentrating instead on producing vessels for the Navy. The only significant recent contract won by a U.S. shipyard came in 2022, when Matson, a Hawaii-based carrier, ordered three midsize container ships from the Hanwha Philly Shipyard in Philadelphia.
Matson, which serves domestic routes, needs the vessels to comply with the Jones Act, which requires that cargo moving between two American ports is carried aboard a U.S.-built ship.
The protectionist law, dating to 1920, helps explain why U.S. shipyards are so uncompetitive, analysts said. Matson paid roughly $330 million per ship, while Chinese shipyards offer similar vessels for just $60 million, according to Lloyd's List, a London-based industry publication.
Trump's widespread imposition of import taxes, including on materials used in shipbuilding such as steel, will only make the domestic industry less competitive in global markets, said Rob Willmington, a Lloyd's List analyst.
"China builds what the industry wants," he said. "You can go to them with your own design, and they'll do it and do it for 20 percent less than South Korea. What's missing is the market for U.S. ships."