On April 17, 2025, the United States Trade Representative (the “USTR”) issued a Notice of Action to impose certain services fees on international maritime transportation services rendered by Chinese operators and ship owners using Chinese-built vessels, to be applied on a non-discriminatory basis, in order to counter China’s market dominance in the shipping, logistics and shipbuilding sectors. The USTR indicated the possibility of imposing additional measures and opened a public comment period until May 19, 2025, conducting a hearing on the same day. No final decision regarding additional measures has been announced yet.

On March 12, 2024, the US domestic industry requested the initiation of an investigation under Section 301 of the Trade Act of 1974 (“Section 301”) against China’s actions, policies and practices in the maritime transport, logistics and shipbuilding sectors. In response, the USTR commenced the Section 301 investigation on April 17, 2024, and on January 16, 2025, published a report concluding that China’s actions aimed at achieving dominance in these maritime sectors were unreasonable. Accordingly, it proposed measures under Section 301 against China’s actions on February 21, 2025 and opened a public comment period.

The measures announced by the USTR on April 17, 2025 were based on input from over 600 stakeholders. As shown below, the USTR’s measures do not only target Chinese shipping companies, but also commercial oceangoing vessels built in China and shipping companies in other countries that operate Roll-on/Roll-off (“RORO”) vessels (i.e., car carrying vessels) built in countries other than the United States. Therefore, it is necessary to carefully review the impact of this measure and take appropriate measures.
 

• Charges are based on net tonnage (“NT”) and will be increased in stages over a three-year period.
   

• The fee may be charged up to five times per vessel per year and is applicable for each voyage transiting through each specified route or US port.
  
  * “A vessel owner of China” or “vessel operator of China” refers to an entity that meets any of the following criteria:
   

• The fee amount that is larger among (i) the fee based on the NT of the vessel, or (ii) the fee charged per container is imposed. The fee will be incrementally increased over a three-year period.
   

• The fee is charged up to five times per vessel per year, and is charged for each voyage that transits through each route or US port.
   

• When ordering and acquiring US ships of the same gross tonnage class as the subject ships, fees may be exempted for up to three years.
   

• The fees imposed in this Annex do not apply to the following Chinese-built vessels:
   

• This fee is assessed on any foreign-built vehicle carrier entering its first US port or location from outside the US customs territory, based on its Car Equivalent Unit (“CEU”) capacity.
   

• The vessel operator is responsible for calculating this fee and providing supporting documentation, upon request.
   

• The vessel operator must pay all accumulated fees for which that entity is liable as determined by the CBP. Payment may be made using existing government methods to the extent possible as determined by the CBP.
   

• The CBP will suspend this applicable fee on a particular vessel for a period not to exceed three years if the vessel owner orders and delivers a US-built vessel of equivalent or greater CEU. If a prospective vessel owner does deliver the US-built vessel ordered within three years, the fees will be due immediately.
   

• The USTR will impose a restriction to require the use of US registered/flagged vessels for the maritime transport of a certain percentage of Liquefied Natural Gas (“LNG”) exports after three years. The applicable percentage is detailed in the table below.
   

• The term “US-built vessel” means a vessel meeting the following requirements:
   

• This requirement will not apply to a particular vessel for up to three years if the vessel owner orders and delivers a US-built vessel of equivalent or greater LNG capacity, measured in cubic feet.
   

• If the above mentioned terms are not met, then the USTR may suspend LNG export licenses until the terms are met.
  
  * The measures in sections 1 to 4 listed above do not apply concurrently. In other words, for a single vessel, either one of the fees in items 1 to 3 will apply, or the restriction in item 4 will apply. Multiple types of fees will not be applied concurrently, nor will fees and LNG-related restrictions be applied concurrently.
   

* The fees in sections 1 to 3 above are imposed when a ship enters the US from outside the customs territory of the US, and are imposed once per voyage even if the ship passes through multiple US ports.
 

• Where an importer cannot attest that the subject STS crane was not manufactured by a company owned or controlled by a Chinese person, such crane is subject to the proposed tariffs.
   

Regarding the proposed new measures, the USTR requested written comments on the scope of the tariff measures, the level of tariff increases, the timing of tariff increases and their effectiveness, among other matters (the comment period ended on May 19, 2025).
 

Meanwhile, on April 9, 2025, President Trump issued an executive order, titled “Restoring America’s Maritime Dominance,” aimed at revitalizing the US’s maritime industry. The executive order directs the USTR to “within 90 days, engage allied and partner nations to implement measures similar to those outlined in this order,” indicating that the US is likely to request countries such as South Korea, Japan and Australia to consider adopting similar measures.

In addition, the US Congress reintroduced the SHIPS for America Act of 2025 (the “SHIPS Act”) on April 30, 2025, to promote prosperity and security in the US. This bill, initially introduced on December 19, 2024, was brought forward as a bipartisan effort in response to the pressing need to revive the shipbuilding industry to strengthen national security. The bill also aligns with the objectives set forth in the executive order, “Restoring America’s Maritime Dominance.”

The bill aims to reduce relevant regulations and administrative burdens to: (i) increase the number of US merchant vessels from approximately 80 to 250 within ten years, (ii) rebuild the US shipbuilding industry, (iii) support US-flagged ships in gaining commercial competitiveness, (iv) establish a Maritime Security Advisor’s Office within the White House, and (v) create a Maritime Security Trust Fund.

Through various legislative and administrative measures, the US has reaffirmed the importance of shipbuilding and shipping to national security and is actively making efforts to revitalize these sectors. Korean companies export to the US using Chinese shipping companies or Chinese-built ships from time to time. Therefore, it will be necessary to follow up the developments regarding the imposition of the fees on Chinese shipping companies and Chinese-built ships, and try to find alternative shipping companies.

^[1]   Vessel components: Air circuit breakers; Welded shipboard anchor and mooring chain; Powered and non-powered valves in Federal Supply Classes (“FSC”) 4810 and 4820 used in piping, machine tools in the FSC for metal-working machinery numbered 3405, 3408, 3410 through 3419, 3426, 3433, 3438, 3441 through 3443, 3445, 3446, 3448, 3449, 3460, and 3461; Auxiliary equipment for shipboard services, including pumps; Propulsion equipment, including engines, propulsion motors, reduction gears, and propellers; Shipboard cranes; Spreaders for shipboard cranes; Rotating electrical equipment; including electrical alternators and motors; Compressors, pumps, and heat exchangers used in managing and re-liquefying boil-off gas from liquefied natural gas.

[Korean Version]