WASHINGTON — Federal Maritime Commission Chairman Louis Sola told port executives that a priority under his tenure would be assisting U.S. exporters, but that didn’t quell concerns about the effect that million-dollar port fees planned against Chinese vessel operators would have on American ports.
“Exports, particularly energy and agriculture, could be priced out and make competitors from other nations more affordable for our customers abroad,” an attendee told Sola at a legislative conference sponsored by the American Association of Port Authorities in Washington this week, after Sola gave a keynote speech.
“From your perspective, and the new administration’s perspective, do you think there’s a willingness to alter what has been proposed to take into account what would be the effects on exports, particularly since American exports seem to be a priority?”
Sola – who emphasized he was speaking on his own behalf and not for the FMC or the Trump administration – responded that the U.S. trade representative (USTR), which is proposing the fees following an investigation into China’s shipping practices, is “very well aware” of how the fines could impact American exporters.
“And we have drawn up our concerns to [USTR] to represent everybody here in the room,” he said. “I can say that we are definitely advocating for U.S. exporters and the U.S.-flag fleet.”
Under the USTR proposal, unveiled by the Trump administration in February, ships constructed in China would face fees of up to $1.5 million per U.S. port call. Vessel operators with even one Chinese-built ship in their fleet could be charged $500,000 per call, while Chinese shipping companies like Cosco would incur $1 million per call for any vessel, regardless of its origin.
The unprecedented fees aim to counter China’s dominance in global shipbuilding and maritime transport but could inadvertently disrupt U.S. trade flows and supply chains.
Brian Clark, executive director of the North Carolina State Ports Authority, has been told by major port customers that should USTR move ahead with the fees, carriers will consolidate their port calls to a minimum number of major ports to minimize costs, bypassing smaller ports like his.
“Not only would carriers remove midsized ports from rotations entirely, precipitating the sure demise of such ports, but larger ports would experience immense congestion leading to inefficiencies worse than what was experienced during the peak of the pandemic supply chain disruptions,” Clark wrote in comments filed on Friday with USTR.
“Without access to port alternatives like the Port of Wilmington and the Port of Morehead City, North Carolina businesses will face higher transportation costs, driven by significant increases in first- and last-mile expenses to reach major ports.”
John McCown, a container shipping expert, told USTR that the fees would have more adverse consequences than tariffs, particularly on exports.
“By having the proposed fees apply to all ships whether involved with imports or exports, they will effectively be a direct tariff on exports … and the American jobs linked to those exports,” he warned.
The fees have raised concern about possible effects from all parts of the U.S. supply chain, including trucking.
“The trucking industry is still in a deep recession and companies are going out of business all over the country,” wrote Mitchell Bros. Truck Line, a drayage trucking company serving the ports of Seattle and Tacoma, Washington, in comments to USTR.
“These policies would be catastrophic for our industry as a whole. We need policies that promote economic growth and promote a sense of stability. These policies would cause major disruption and create extreme economic instability.”
Sola was confident, however, that the trade policies being implemented by the administration would ultimately benefit the U.S. maritime sector, and attested to President Donald Trump’s focus on the sector.
“I’ve spoken to him on numerous occasions about shipping, and he understands the supply chain as well. We’ve never had a president prioritize shipping the way this one has” in the first two months of an administration, Sola told conference attendees.
But he cautioned that with Trump emphasizing shipping, “a lot of things may affect you in a bad way and may give you some concern. Don’t discredit at first sight; go ahead and work through it. The president is going to use a chain saw at first and then he’s going to use a scalpel. So if you have concerns on [executive orders] or proposed legislation, now’s the time to be involved.
“That being said, we’re also going to see an investment in the United States maritime sector that I don’t think that we have seen in my lifetime, and that is really saying something.”