US Trade Representative Implements Port Fee Proposal22 April 2025

On April 17, 2025, the Office of the US Trade Representative (“USTR”) published a notice of action (the “USTR Notice”) implementing its port fee proposal, first announced on February 21, 2025. The rules differ substantially from the February proposal (summarized here). The calculation of the fees has changed to a net tonnage-based fee (or for certain vessels, based on containers discharged or Car Equivalent Units). Several points have been clarified. Specialized rules apply to LNG transportation and vehicle carriers, including fees and restrictions on non-Chinese vessels. The port fees are slated to go into effect beginning October 14, 2025, with rates increasing after such time on a phased schedule.

Summary of port fees

The USTR Notice implements the port fee mechanism by means of four non-cumulative “Annexes.”

Annex I – Fee on Chinese vessel operators and vessel owners

• Beginning October 14, 2025, a fee will be imposed on the entry of a Chinese-owned or operated vessel into a US port at a rate of $50 per net ton. The rate will be increased beginning in April 2026, plateauing at $140 per net ton in April 2028.
• “Owners” and “operators” are defined by reference to US Customs and Border Protection (“CBP”) Form 1300. The instructions to the CBP Form state that the “operator” is defined as the party listed on the Certificate of Financial Responsibility (Water Pollution) unless other verifiable charter or lease arrangement indicates otherwise. The form does not include guidance as to who is the “owner.”
• “China” includes the People’s Republic of China, Hong Kong and Macau, although not Taiwan. A Chinese owner or operator generally includes, inter alia, an owner or operator that is a citizen of or headquartered in China, as well as an entity that is owned or controlled by a Chinese citizen.

Annex II – Fee on Chinese-built vessels

• Beginning October 14, 2025, a fee will be imposed on the entry of a Chinese-built vessel into a US port at a rate of $18 per net ton. The rate will be increased beginning in April 2026, plateauing at $33 per net ton in April 2028. In the case of container vessels, an alternate rate will be imposed (if higher than the tonnage rate) calculated on the basis of containers discharged: starting at $120 per container, and plateauing at $250 per container.
• There are several exceptions to the imposition of the fees, including for vessels arriving to the US empty or in ballast, certain small vessels, certain US-owned vessels, vessels entering the continental US from a voyage of less than 2,000 nautical miles, and certain specialized vessels.

Annex III – Fee on foreign-built vehicle carriers

• Beginning October 14, 2025, a fee will be imposed on the entry of a non-US-built vehicle carrier vessel into a US port at a rate of $150 per Car Equivalent Unit (CEU).

Annex IV – Restriction on LNG exports

• Beginning April 17, 2028, at least 1% of all LNG intended for exportation by vessel in a calendar year must be exported by a US-built vessel. This percentage increases annually, plateauing at 15% in April 2047.

Operation and common provisions of Annexes

• The fees and restrictions imposed by the annexes are not cumulative. The order of operation of the Annexes is 1) Annex IV (LNG exports); 2) Annex III (non-US car carriers); 3) Annex I (Chinese owners/operators); and 4) Annex IV (Chinese-built vessels). For example, a Chinese-built vessel that is subject to fees because it has a Chinese owner or operator will not also be subject to fees on Chinese-built vessels.
• The fees on Chinese-built vessels and foreign-built vehicle carriers, and restrictions on LNG exports, will be suspended for up to three years if the vessel owner orders and takes delivery of a US-built vessel of equivalent or greater capacity. This suspension does not apply to Chinese-owned or leased vessels.
• The fees on Chinese-owned or operated vessels and Chinese-built vessels are imposed up to five times per vessel per year. This limitation does not apply to the fees on foreign-built vehicle carriers.
• The fees on Chinese-owned or operated vessels and Chinese-built vessels are assessed for each string of US voyages (so that a voyage that involves deliveries at multiple US ports of call in a row would trigger only a single fee). This rule does not apply to the fees on foreign-built vehicle carriers.

Notable changes to the proposed rules

The USTR differs substantially from the rules that had been proposed in February. Among the relevant changes are:

• The fees are now calculated based on tonnage (or containers delivered/vehicle carrying capacity) rather than per vessel. The fees on Chinese owners and operators are also generally higher than the fees on Chinese-built vessels.
• There are multiple exceptions to the fees on Chinese-built vessels (e.g., small vessels and vessels arriving in the US empty), but the exceptions do not apply to the fees on Chinese owners and operators.
• The exception from the fees on small Chinese-built vessels applies to vessels with a capacity of equal to or less than: 4,000 Twenty-Foot Equivalent Units (relevant for container ships), 55,000 deadweight tons, or an individual bulk capacity of 80,000 deadweight tons. The reference to “individual bulk capacity” appears to mean that dry bulk carriers with capacity of up to 80,000 deadweight tons are exempt, whereas for other vessels the maximum tonnage capacity appears to be 55,000 deadweight tons.
• There are no fees based on the fleet makeup of the owner or operator; the focus is on the vessel itself and its owner/operator.
• The fees on newbuilding orders from Chinese shipyards have been eliminated.
• The fees on vehicle carriers apply to any non-US-built vessel, whether or not there is a Chinese nexus.
• The requirement that certain exports be carried on US-built vessels now applies only to LNG, and only starting in 2028. LNG carriers are exempt from the other fees.