News / China announces 'tit-for-tat' retaliation as USTR port fees loom

ID 110497741 © Sheila Fitzgerald | Dreamstime.com

Beijing has unveiled retaliatory measures in response to the US Trade Representative’s (USTR) port fees for Chinese-built vessels and Chinese carriers.

China’s state news agency, Xinhua, reported that the state council had decided to amend its regulations governing international maritime transport.

“If any country or region takes, or assists/supports taking, discriminatory prohibitions, restrictions, or other similar measures against operators, vessels, or crews engaged in the People’s Republic of China’s international maritime transport and its auxiliary services, except where relevant treaties or agreements provide full and effective remedies, the Chinese government shall, according to actual circumstances, take necessary countermeasures.

“Such measures may include, but are not limited to:

• imposing special fees on vessels of that country or region when berthing at Chinese ports;
• prohibiting or restricting vessels of that country or region from entering or leaving Chinese ports;
• and prohibiting or restricting organisations and individuals of that country or region from obtaining data, information, and engaging in international maritime transport and its auxiliary services involving Chinese ports.”

The most obviously affected carrier would be Hawaii-headquartered US shipping line Matson, which, along with Seaboard Marione, was given a clear exemption from the USTR fees.

Matson runs two transpacific services, the express MAX service on a Shanghai-Ningbo-Long Beach rotation, and the CLX service. which incorporates a Jones Act element, with a port rotation of Long Beach-Honolulu-Guam-Naha-Ningbo-Shanghai.

The CLX service deploys five US-flagged and -built vessels of between 2,300 teu and 3,600 teu, while MAX also deploys five, of between 4,200 teu and 4,860 teu, according to the Xeneta-owned eeSea liner database.

This raises a potentially interesting question of howand retaliatory measures are intended to work. Under the USTR fee structure, vessels under 4,000 teu are exempt, which in theory would mean the ships on Matson’s CLX service would not be subject to retaliation while its vessels on the MAX service would.

Meanwhile, the wording of the final regulatory change is frustratingly vague for liner network and supply chain planners, as it potentially leaves scope for US shippers and their 3PLs to be affected.

The USTR port fees are set to be introduced under its 301 legislation on 14 October, and are set to applied in response to what the US has deemed to be the Chinese government’s unfair support of its own maritime industry.

Chinese carriers – registered in China and Hong Kong, but not Taiwan – will be levied $50 per net ton for any ship calling at the US, while China-built vessels will face a $120 per teu fee.

The fees will increase over the following three years.