What Is Port Fee Battle That Has US And China At Loggerheads; Will It Trigger A Global Trade War? | World News

US-China New Port Fees Dispute: The uneasy calm between Washington and Beijing has been disrupted once again. This week, both countries imposed new port fees on ships, signaling a new turn in trade tensions that are transforming global trade.

The charges went into effect Tuesday. Analysts say the measures reveal how the seas have become a new front in the competition between two major economies. This new increase follows China’s move to restrict exports of rare earth elements after the US administration imposed new trade restrictions.

A meeting between President Donald Trump and Chinese Premier Xi Jinping is planned for the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this month. Officials in both capitals are now watching to see whether the new maritime dispute will cast a shadow over the talks.

New Port Fees

The White House executive order titled ‘Restoring America’s Maritime Dominance’ instructed the United States Trade Representative (USTR) to begin collecting fees from China-bound ships.

Under the order, operators of Chinese-owned or operated ships must pay $50 per net ton; this figure will rise to $140 by April 2028; Ships built in China must pay $18 per ton or $120 per container; this figure will rise to $33 and $250 in 2028; Each ship will be charged a maximum of five times a year; and long-term U.S. ethane and LPG importers using Chinese carriers will be exempt through Dec. 10.

China responded quickly. On October 10, it announced parallel charges on US-bound ships starting October 14. announced that ships owned or operated by American entities would pay 400 yuan ($56) per ton, limited to five voyages per year; the rate will rise to 1,120 yuan ($157) per ton over time; and empty ships entering for repairs and Chinese-made ships will remain exempt.

Beijing’s Ministry of Transport described the decision as a “measure against wrong and discriminatory practices” by Washington.

China also announced sanctions on five subsidiaries of South Korea’s Hanwha Ocean, accusing them of aiding US investigations into Chinese trade.

An Example of Maritime Competition

The US had previously taken action in April to impose higher fees on Chinese ships in order to support domestic shipbuilding. The move follows an investigation under the Biden administration that found China’s shipping industry benefited from heavy state funding.

“China has long dominated shipbuilding and logistics through unfair policies,” a White House trade official said.

Beijing’s Ministry of Commerce responded to the claim on Tuesday: “If the US chooses conflict, China will do so to the end. If it chooses dialogue, China’s door will remain open.”

China Leader in Shipbuilding

Data from the Center for Strategic and International Studies (CSIS) shows that China will build 53 percent of all commercial ships in 2024. South Korea and Japan followed, while the United States built only 0.1 percent.

China State Shipbuilding Corporation (CSSC) remains the largest player in the industry and also builds naval warships. According to a report by the US Department of Defense, the Chinese navy had 355 ships in 2020, while the US had 293 ships.

Washington has repeatedly expressed concerns about Beijing’s control over the global maritime supply chain.

Washington’s Domestic Edition

America began considering trade action against Chinese shipbuilding in mid-2024 after pressure from five major unions. They accused Beijing of distorting global competition through subsidies and state-backed investments.

After months of hearings, President Trump issued Executive Order 14269 titled ‘Restoring America’s Maritime Dominance’ in April.

“We will revitalize the American shipbuilding industry. We used to build so many ships that we will quickly rebuild them very soon.”

Matthew Paxton, president of the Shipbuilders Council of America, welcomed the order. “By fully utilizing our domestic shipyards, we can rebuild our competitiveness, strengthen defense and create thousands of skilled jobs,” he said.

Impact on Global Trade

Industry experts warn that new measures could strain trade routes. Chinese port charges could particularly impact oil tankers, which represent 15 percent of global shipping capacity, according to Clarksons Research.

China’s largest carrier, China Ocean Shipping Company (COSCO), may face costs exceeding $3.2 billion. Reuters reported that European shipping companies such as Maersk, Hapag-Lloyd and CMA CGM are already diverting China-bound ships away from US ports.

“We are in an intense phase of the collapse. Owners are trying to find workarounds,” said independent analyst Ed Finley-Richardson.

Some US ship operators are reportedly selling cargo mid-route to avoid Chinese ports, but Reuters was unable to confirm these reports.

Meanwhile, Hanwha Ocean’s shares fell 6 percent after Beijing imposed sanctions on its subsidiaries.

Rare Earths and the Next Chapter

China, which dominates the global supply of rare earth metals used in electronics and defense manufacturing, announced new export restrictions on five materials (holmium, erbium, thulium, europium and ytterbium) as part of its Announcement No. 61 of 2025.

President Trump responded by warning that a 100 percent tariff would be imposed on Chinese goods starting November 1.

The two countries previously agreed to a 90-day pause in September to ease trade tensions, but that ceasefire ends around November 9. The latest measures suggest that a new cycle of economic conflict may already have begun.

Global markets are following the developments closely. Economists fear that a continued rise could disrupt supply chains and slow the global recovery.

As one analyst put it, “This is no longer about ships or schedules. This is about power and routes that connect the world.”