The strong industry resistance to a US port fee proposal is a stark indication that unilateral measures weaponizing trade have collided with economic reality, facing fierce pushback from industries reliant on efficient global supply chains.
The Trump administration is considering softening its proposed fee on China-linked ships visiting US ports, Reuters reported on Wednesday, citing six sources with knowledge of the matter.
Meanwhile, US Trade Representative Jamieson Greer told lawmakers on Tuesday that not all of the agency’s proposed port fees for Chinese-built ships to dock at US ports will be implemented, and they may not be cumulative, according to another Reuters report on Wednesday.
The development isn’t merely a sign of a policy tweak. It actually exposes the great resistance the US is facing in implementing a policy that could be harmful not just to itself but also to global shipping and supply chains. A flood of negative feedback from industries, such as global shipping companies, port operators, importers and manufacturers has had some influence.
The US attempt to force the global shipping industry to “de-China” through its port fee policies represents a delusion that a single country can unilaterally rewrite the rules of international trade and reshuffle the global shipping market without consequences. If anything, every such attempt to weaponize protectionist measures against a crucial trading partner reveals a staggering disregard for the interconnectedness of modern supply chains and the cooperation network that underpins global commerce.
For one thing, China’s position in the global shipping sector is no coincidence. Chinese-built ships are known for their quality, timely delivery and affordability. The rise in market share of these cost-effective vessels has contributed to a reduction in maritime transportation costs, thereby bolstering world trade and benefiting the global economy, including that of the US.
Moreover, replacing Chinese-built ships could lead to increased costs and expenses, which would ultimately be reflected in higher shipping fees for US routes, resulting in elevated prices for goods entering and leaving the country.
Furthermore, the damage of the proposed port fee would extend far beyond US shores. Chinese-made vessels comprise 24 percent of the global fleet for MSC, the largest ocean carrier in the world, while its new vessel order book shows 92 percent of its future vessels will be made in China. Maersk, the No.2 ocean carrier, has a fleet that is 20 percent Chinese-made, with 79 percent of its order book from China. CMA CGM’s fleet is 41 percent Chinese, with 54 percent Chinese-made vessels on order, while Hapag Lloyd’s global fleet is 21 percent Chinese-made, with 89 percent of future ships to be made in China, according to a recent CNBC report.
The US accounts for about 12 percent of global maritime trade, according to the Baltic and International Maritime Council. If shipping costs were to surge due to US policies, it could destabilize the entire shipping ecosystem, triggering a large-scale restructuring of global shipping routes. Some have begun assessing the feasibility of circumventing port fees by diverting cargo through Mexico or Canada, according to media reports. But this passive and hurried adjustment of the supply chain would only inevitably lead to a decline in the efficiency of the global logistics network.
In this context, Washington’s port fee dilemma is clear: it wants to bolster its own industries by weakening China’s industrial competitiveness but is incapable of replacing what it seeks to dismantle, thus inviting a backlash from the domestic and global shipping industries.
The inability of the US to replace the very supply chains it seeks to undermine reflects a fundamental flaw in US trade policies that extend far beyond shipping. In manufacturing, agriculture and technology, Washington’s protectionist playbook faces the same hurdle: imposing barriers without viable alternatives.
This may help explain why it is foreseeable that similar industry backlash and opposition will intensify across various global sectors if the US continues to weaponize trade.
If the US insists on forcibly implementing such policies, it will deal a severe blow to global trade and signify America’s self-isolation from the global trade system as it is, in essence, pitting itself against the entire global trade regime, which will ultimately lead to the US being isolated.
