USTR Proposes Two-Month Extension of China Port Fee Pause

By Amara Osei

USTR has proposed keeping China-linked vessel port fees suspended through Jan. 9, 2027, extending the existing one-year pause beyond its Nov. 9 expiration. The two-month bridge would preserve current liability rules while Washington and Beijing continue negotiations over China’s dominance of global shipbuilding.

The proposal, scheduled for publication in the Federal Register on Oct. 26, would extend the suspension from Nov. 10, 2026, through Jan. 9. During that window, shipping companies would incur no liability for port fees under Annexes I, II and III of the original Section 301 action.

The scope covers Chinese-owned, Chinese-operated and Chinese-built vessels calling at U.S. ports, plus certain foreign-built vehicle carriers. The suspension also continues to cover certain duties on ship-to-shore cranes and cargo-handling equipment.

USTR said in the notice: “The United States is continuing to engage with China with the goal of obtaining the elimination of the acts, policies, and practices at issue in the investigation.” The language ties another short reprieve to the unresolved U.S.-China negotiation.

What does the extension change for shippers?

For shippers, carriers and forwarders, the proposal means continuity, not cancellation. Covered vessels would avoid a new U.S. port-fee charge through Jan. 9, while covered U.S. calls remain free of that levy during the proposed pause. Shippers gain two months of fee-liability certainty, not a durable end to the trade dispute.

Washington began collecting the fees on Oct. 14, 2025, then suspended them Nov. 10, leaving them in force for less than four weeks. China also suspended its retaliatory fees on U.S.-linked vessels. The original measures threatened substantial carrier costs and disruption to established shipping networks.

During that brief window, U.S. carrier Matson reported incurring $6.4 million in reciprocal Chinese port fees. China’s state-owned COSCO faced an estimated $1.5 billion in annual U.S. charges.

Those figures show the exposure, not a forecast for the proposed extension. The arithmetic remains rather unforgiving.

The short-lived fee regime exposed large bills

The proposal comes nearly a year after President Donald Trump and Chinese President Xi Jinping agreed to suspend the port fees as part of a broader trade agreement reached in South Korea. That agreement placed the vessel levy inside a wider bargain between the two governments.

Washington’s action grew from a Section 301 investigation launched during the Biden administration after a 2024 petition by the United Steelworkers and other labor organizations. The investigation concluded that China’s industrial policies and subsidies distorted global competition and undermined U.S. commerce.

Under Trump, the resulting port fees became central to the strategy for challenging China’s maritime dominance and encouraging investment in American shipbuilding. The proposal keeps that strategy intact, at least for another two months.

Andy Abbott, CEO of ACL, told gCaptain: “ACL’s unique ships were mistakenly classified by USTR as vehicle carriers even though only 1% of its cargo is automobiles.” He said any port fee would hit ACL’s growing U.S. export business, prompting concern among its customers.

Its largest U.S. container and heavy-machinery customers feared the company would redeploy ships from U.S. trade to the booming China trade. With the fees suspended, ACL can continue serving the U.S. market with the fastest transit times from the U.S. East Coast to Europe.

The International Chamber of Shipping and World Shipping Council welcomed last year’s suspension. Both warned that competing U.S. and Chinese measures could raise transportation costs and disrupt global trade.

Shipbuilders and unions want the levies back

In June, Senators Mark Kelly (D-Ariz.) and Elizabeth Warren (D-Mass.) urged USTR to reinstate the measures immediately. In a letter to U.S. Trade Representative Jamieson Greer, they argued that the suspension undermined efforts to rebuild the U.S. commercial shipbuilding industry. They called the fees critical to revitalizing those yards.

Their argument rests on output: Chinese yards now account for more than half of global commercial vessel production, compared with 0.1% for the United States. The senators also questioned whether Washington had secured meaningful concessions from Beijing and how it would fund the proposed Maritime Security Trust Fund without fee revenue.

Maritime labor unions have criticized the suspension as weakening one of the few measures designed specifically to counter China’s state-supported shipbuilding industry. For carriers, that political contest matters because the fee threat reached their networks in less than four weeks.

A broader cargo charge remains on the table

The administration is also considering a Maritime Action Plan unveiled earlier this year. Unlike the China-specific Section 301 measures, it envisions fees on all foreign-built commercial vessels calling at U.S. ports. Proceeds would support domestic shipbuilding through the proposed Maritime Security Trust Fund.

Potential charges range from 1 cent to 25 cents per kilogram of imported cargo. That equals $10 to $250 per metric tonne. At the upper end, the administration estimates $1.5 trillion over 10 years, or roughly $150 billion a year on a straight-line basis.

The International Chamber of Shipping warns that broad charges could significantly increase shipping costs and disrupt global trade. The chamber nevertheless supports efforts to expand U.S. shipbuilding capacity. The administration must therefore reconcile a domestic rebuilding agenda with the risk of passing new costs to importers, exporters and consumers.

The next deadline arrives Jan. 9

USTR has opened a public comment period on the extension. Submissions are due at 5 p.m. Eastern Time on Oct. 30 through the USTR public comment portal under docket USTR-2026-0694.

The extension has not been finalized. The notice also does not address whether China will extend its suspension of retaliatory fees on U.S.-linked vessels, leaving both sides’ measures vulnerable to another policy reversal.

Jan. 9, 2027 is the next hard deadline: absent a longer agreement, covered vessels lose their Section 301 shield, while the broader plan keeps a $10-to-$250-per-tonne charge in play. The pause buys time. It does not settle the bill.