Addressing China Dominance in Global Maritime and Ship Building Sectors

By: Jim Peterson

Posted: May 1, 2025

On March 12, 2024, five national labor unions filed a petition with the United States Trade Representative (USTR) requesting an investigation into the acts, policies, and practices of China targeting the maritime, logistics, and shipbuilding sectors for dominance. Based on the outcome of that investigation, the USTR found there to be significant adverse impacts to the US shipbuilding industry, due to Chinese government practices and dominance. In February of 2025, the USTR proposed remedies to help address those adverse practices, and support the US shipbuilding industry.

The proposed remedies included significant port fees for the use of Chinese built and owned vessels in delivering imports into the US, or for the export of products from US ports. Port fees for vessels used in the export of bulk US grain commodities equated to upwards of $.60 per bushel. This would lead to dramatic short and long-term economic impacts on the competitiveness of US wheat exports, likely pricing us out of many markets. The focus of the fees by USTR is to generate revenue to help restore US shipbuilding capacity, and lessen Chinese dominance of the world maritime fleet, by reducing the competitive price advantage of Chinese built and crewed ships in global maritime trade.

Chinese built vessels currently account for more than one-half of the global fleet. They are the dominant source for export and import companies looking to move bulk and containerized freight. On the other hand, US built ships account for about 0.2 percent of the global fleet.

The USTR provided an opportunity for interested industry groups to provide comments on their proposed remedies. The North Dakota Wheat Commission was a participant in industry letters and in the comments submitted to USTR by US Wheat Associates and the National Association of Wheat Growers in late March of this year. While the wheat industry supports the US Administration and USTR goal of helping to revitalize the US ship building industry, as it is a matter of economic, strategic and military importance, the near term impact of proposed remedies on export competitiveness would have been significant. There are vastly limited shipping alternatives in the short-term, and it may take up to seven years to build US ships with any meaningful volume, according to some industry experts. Impacts on US wheat export sales were already being felt in recent months, with countries choosing non-US origins, or adding clauses to contracts which passed the potential added costs to exporters, and ultimately producers.

On April 17, 2025, USTR announced its final remedy to address Chinese shipbuilding subsidies and dominance of global maritime trade, based on the comments received. USTR and the Administration are proposing a more targeted approach, citing the concerns of US industries in the near term. The US wheat industry is appreciative of this more targeted approach. Vessels that are routinely used for bulk US wheat exports will be exempt from additional port fees, if they are arriving empty.

The impact on agricultural products that are exported by container is not as clear, since most container ships arrive into port with loaded cargo. Industry experts expect much of the additional port cost to be borne by importers since those products are much higher in value, with lower valued ag products used for the back haul.

It will take some time to determine the impact, if any, to US wheat exports. The final remedy is certainly much more acceptable to the US wheat industry, compared to the original proposal. US wheat is typically one of the highest valued in the world export trade, and as such, already faces a competitive disadvantage in price to wheat from other origins. Any additional costs added to US export values would be borne by producers in lower farm-gate prices and reduced export volumes.