The U.S. and China on Tuesday started charging new port fees on each other's vessels, making the high seas a new front in the escalating trade war between the world's two largest economies.
China said it had started to collect the special charges on U.S.-owned, operated, built or flagged vessels, but clarified that Chinese-built ships would be exempted from the levies.
In details published by state broadcaster CCTV, China spelled out specific provisions on exemptions, which also include empty ships entering Chinese shipyards for repair.
The China-imposed extra port fees would be collected at the first port of entry on a single voyage or for the first five voyages within a year, following an annual billing cycle beginning on April 17.
Early this year, U.S. President Donald Trump's administration announced plans to levy the fees on China-linked ships to loosen the country's grip on the global maritime industry and bolster U.S. shipbuilding.
An investigation during former President Joe Biden's administration concluded China uses unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, clearing the way for those penalties.
China hit back last week, saying it would impose its own port fees on U.S.-linked vessels from the same day the U.S. fees took effect.
Analysts expect the China-owned container carrier COSCO to be the most affected, shouldering nearly half of that segment's expected $3.2 billion cost from those fees in 2026.
In a related move, Beijing also imposed sanctions on Tuesday against five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, which it said had "assisted and supported" a U.S. probe into Chinese trade practices.
China also launched an investigation into how the U.S. probe affected its shipping and shipbuilding industries.
"This tit-for-tat symmetry locks both economies into a spiral of maritime taxation that risks distorting global freight flows," Athens-based Xclusiv Shipbrokers Inc. said in a research note.
A Shanghai-based consultant advising global companies on trade with China noted that the new fees may not significantly disrupt the industry, and any rising costs would likely be offset by higher prices.
"What are we going to do? Stop shipping? Trade is already pretty disrupted with the U.S., but companies are finding a way," the consultant said, asking to remain anonymous as he was not authorized to speak with the media.
The U.S. announced last Friday a carve-out for long-term charterers of China-operated vessels carrying U.S. ethane and liquified petroleum gas (LPG), deferring the port fees for them through Dec. 10.
But ship-tracking company Vortexa identified 45 LPG-carrying VLGCs – 11% of the total fleet – that would still be subject to China's port fee, its Americas analyst Samantha Hartke said.
Clarksons Research said in a report that the new port fees could affect oil tankers, accounting for 15% of global capacity. Jefferies analyst Omar Nokta estimated that 13% of crude tankers and 11% of container ships in the global fleet would be affected.
In a reprisal against China for curbing exports of critical minerals, Trump on Friday threatened to impose additional 100% tariffs on goods from China and implement new export controls on "any and all critical software" by Nov. 1.
Administration officials, hours later, warned that countries voting in favor of a plan by the United Nations' International Maritime Organization (IMO) to reduce planet-warming greenhouse gas emissions from ocean shipping this week could face sanctions, port bans, or punitive vessel charges. China has publicly supported the IMO plan.
"The weaponization of both trade and environmental policy signals that shipping has moved from being a neutral conduit of global commerce to a direct instrument of statecraft," Xclusiv said.
Shares in Shanghai-listed COSCO rose more than 2% in early trading on Tuesday. The company said its board had approved a plan to buy back up to 1.5 billion yuan ($210.3 million) worth of its shares within the next three months to maintain corporate value and safeguard shareholder interest.
The shipping firm did not immediately respond to Reuters' queries about the port fees.
