On Tuesday, the U.S. government began investigating China’s dominance in the shipbuilding industry. The House Armed Services Subcommittee on Seapower and Projection Forces is holding a hearing on U.S. shipbuilding, with a public hearing by the Office of the United States Trade Representative scheduled for March 24.
In addition to the service fee imposed on port calls by Chinese-made vessels, the USTR report from January recommended that ocean carriers with 50% or more of their orders placed in Chinese shipyards, or those expecting deliveries within the next 24 months, be charged up to $1 million per vessel each time they enter a U.S. port. These fees could be refunded annually, up to $1 million per entry, for vessels that are built in the United States.
The proposals aimed at limiting China’s dominance in shipbuilding include imposing restrictions on U.S. exports. Initially, 1% of all U.S. products exported by vessel must be transported on U.S.-flagged vessels operated by U.S. operators. Over the course of seven years, these restrictions will incrementally increase to require that at least 15% of all U.S. goods be exported on U.S.-flagged vessels operated by U.S. entities, with 5% of these vessels also needing to be U.S.-built.
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