China and the United States have begun imposing additional port fees on ships, as trade tensions between the world’s two largest economies reignite due to China’s rare earth export restrictions in response to new trade restrictions imposed by the Trump administration.
Port fees for both countries came into effect on Tuesday, raising concerns among analysts that maritime trade has become a key front line between the two countries.
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Despite the temporary pause in the tariff war, new trade tensions have erupted and come as President Trump is expected to meet with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this month.
China has accused the US of “double standards” after the US threatened to impose 100% tariffs on Chinese goods in response to Beijing’s rare earth ban last week.
As the two countries continue trade negotiations, here’s what you need to know about the new port tariffs.
What are the port fees charged by both sides?
The White House executive order, titled “Restoring America’s Maritime Advantage,” directs the Office of the United States Trade Representative (USTR) to impose the following charges by October 14 on the owners and operators of Chinese-built, owned, and operated vessels entering the United States:
Ship operators must pay $50 per net ton for Chinese-owned or operated vessels arriving at a U.S. port, increasing to $140 by April 2028 Ship operators of Chinese-built vessels arriving at a U.S. port must pay $18 per net ton or $120 per container, increasing to $33 and $250, respectively, by 2028 Fees will be charged up to five times a year for individual vessels Long-term users of Chinese-operated vessels transporting U.S. ethane and liquefied petroleum gas (LPG) are exempt until December 10.
China retaliated on October 10, announcing that it would also impose additional levies on U.S.-owned, operated, built, and flagged vessels starting October 14, as follows:
Vessels owned or operated by U.S. companies or individuals will pay a fee of 400 yuan ($56) per net ton per voyage Ships built in the U.S. or flying the U.S. flag will pay the same amount The fee will be charged on up to five voyages per year and is expected to reach 1,120 yuan ($157) per net ton Empty ships entering Chinese shipyards for repairs will be exempt. Ships built in China are also exempt.
China’s Ministry of Transport said in a statement on October 10 that the tariffs were a “countermeasure” to counter the “unfair and discriminatory” practices of the United States.
In a separate but related move, China on Tuesday imposed sanctions on five subsidiaries of South Korean shipbuilder Hanwha Ocean for “aiding and assisting” a U.S. investigation into Chinese trade.
The United States imposed surcharges on Chinese-owned vessels for the first time in April, in a bid to loosen Beijing’s grip on the global maritime industry and shore up American shipbuilding companies. The decision follows an investigation under President Joe Biden’s administration that found China dominates global maritime, logistics and shipbuilding operations using “unfair policies and practices” such as funneling state funds into shipbuilding.
China hit back at the U.S., saying it would impose similar fees on the same day the U.S. tariffs go into effect.
“If the US chooses confrontation, China will follow through, but if it chooses dialogue, China’s door will remain open,” China’s Ministry of Commerce said in a statement on Tuesday.
Who are the main players in global maritime trade?
According to data from the Center for Strategic and International Studies (CSIS), the global commercial shipbuilding industry is dominated by China, followed by South Korea and Japan.
China built 53% of its commercial ships in 2024, while the US built only 0.1% of such vessels. China’s state-owned China State Shipbuilding Corporation (CSSC) is the most important company in the industry, having built more commercial ships per tonnage in 2024 than all U.S. shipyards have built since 1945, according to CSIS.
The state-owned CSSC also manufactures naval warships, among other things, contributing to China’s status as having the largest naval fleet by number of ships, with 355 by 2020, compared to 293 naval vessels in the US at the time, according to a US Department of Defense report.
While analysts say the United States maintains the most powerful navy based on firepower, China’s shipbuilding dominance has raised security concerns in Washington for years.
Why did the US impose restrictions on Chinese-built ships?
The United States is trying to loosen China’s grip on maritime control.
The U.S. government first began considering action against China’s shipbuilding capabilities in May 2024, after five U.S. labor unions petitioned the USTR for “redress” for China’s “unfair” practices in the maritime and shipbuilding sector, citing massive state-sponsored support for the sector, which the U.S. claims gives it an unfair advantage over its competitors.
USTR subsequently launched an investigation into China’s shipping trade practices. In January 2025, after President Trump took office, the department determined that China’s actions were “burdening and restricting” U.S. commerce and decided that action would be taken. Leading up to the promulgation of President Trump’s Executive Order 14269 – Restoring America’s Maritime Control in April, U.S. unions and lobbyists testified in public hearings about future actions for weeks.
In March, President Trump promised in a speech to Congress that his administration would “revive” the U.S. shipping industry, adding that he would create a “Shipbuilding Authority.”
“We’re also going to revive America’s shipbuilding industry, including commercial shipbuilding and military shipbuilding,” Trump told lawmakers, drawing applause from House Republicans. “We used to build a lot of ships. We don’t build a lot anymore, but we’re going to build very fast ships very soon. It’s going to have a huge impact on further strengthening our national security.”
Matthew Paxton, president of the American Shipbuilding Council, praised the president’s actions in a statement after his speech. “By maximizing the capabilities of existing domestic shipyards, the shipyard industrial base can meet growing defense needs, restore America’s competitiveness, and create thousands of skilled jobs in communities across the country,” he said.
How will tariffs affect global trade?
Analysts say moves by both sides are already disrupting global trade operations. China’s new port fees could have a big impact on oil tankers, which account for 15% of global shipping capacity, Reuters reported, while Chinese container shipping company Cosco could bear the biggest burden of U.S. fees, expected to cost the industry $3.2 billion, while shipping intelligence firm Clarksons Research said in a report.
Major shipping companies including Danish-owned Maersk, Germany’s Hapag-Lloyd and France’s CMA CGM have reportedly swapped ships with ties to China from U.S. routes, according to Reuters.
“We are in a hectic phase of disruption and everyone is quietly looking for stopgap workarounds, with varying degrees of success,” independent dry bulk shipping analyst Ed Finley Richardson told Reuters.
The analyst added that there are reports that U.S. shipowners operating non-Chinese vessels are trying to sell cargo to other countries so it can be diverted on its way to China. Reuters reported that the claim could not be immediately confirmed.
Meanwhile, South Korean shipbuilder Hanwha Ocean already faces Chinese sanctions against five of its U.S.-affiliated subsidiaries. Hanwha is one of the world’s largest shipbuilding companies and owns the commercial Philadelphia Shipyard in Philadelphia, USA. According to Reuters, Hanwha Ocean’s stock price fell nearly 6% following the announcement.
What other trade restrictions will be announced? Will this lead to an all-out trade war?
On October 9, China, which has a monopoly on important rare earth metals used in the manufacture of electronic devices, tightened export controls on five types of metals, including holmium, erbium, thulium, europium, and ytterbium, based on “2025 Announcement No. 61.” This is in addition to the seven metal restrictions announced in early April.
In retaliation, President Trump threatened to raise tariffs on Chinese goods to 100% starting November 1st.
The United States imposed heavy tariffs on Chinese goods early in Trump’s presidency to address what the United States sees as an unbalanced trade relationship. Those tariffs were eventually eased after the two countries reached an agreement in September on a 90-day moratorium that was set to expire around November 9th.
But tensions are rising again following China’s new rare earth tariffs and port taxes announced by both countries. Analysts have previously warned that a full-scale trade war between the United States and China could severely damage global markets and trigger an economic recession.
