US Trade Representative implements Port Fee Proposal

Authorized agency Watson Farley & Williams has revealed an article, through which the agency’s companions take a look at a discover of motion, issued by the Workplace of the US Commerce Consultant (USTR) on April 17, 2025 detailing the implementation of its port payment proposal, first introduced on February 21, 2025. The principles differ considerably from the February proposal (summarized right here). The calculation of the charges has modified to a web tonnage-based payment (or for sure vessels, based mostly on containers discharged or Automotive Equal Models). A number of factors have been clarified. Specialised guidelines apply to LNG transportation and automobile carriers, together with charges and restrictions on non-Chinese language vessels. The port charges are slated to enter impact starting October 14, 2025, with charges growing after such time on a phased schedule.

Abstract of port feesThe USTR Discover implements the port payment mechanism by the use of 4 non-cumulative “Annexes.”

Annex I – Price on Chinese language vessel operators and vessel homeowners

Starting October 14, 2025, a payment can be imposed on the entry of a Chinese language-owned or operated vessel right into a US port at a fee of $50 per web ton. The speed can be elevated starting in April 2026, plateauing at $140 per web ton in April 2028.
“House owners” and “operators” are outlined by reference to US Customs and Border Safety (“CBP”) Type 1300. The directions to the CBP Type state that the “operator” is outlined because the occasion listed on the Certificates of Monetary
Accountability (Water Air pollution) until different verifiable constitution or lease association signifies in any other case. The shape doesn’t embody steerage as to who’s the “proprietor.”
“China” consists of the Folks’s Republic of China, Hong Kong and Macau, though not Taiwan. A Chinese language proprietor or operator typically consists of, inter alia, an proprietor or operator that may be a citizen of or headquartered in China, in addition to an entity that’s owned or managed by a Chinese language citizen.

Annex II – Price on Chinese language-built vessels

Starting October 14, 2025, a payment can be imposed on the entry of a Chinese language-built vessel right into a US port at a fee of $18 per web ton. The speed can be elevated starting in April 2026, plateauing at $33 per web ton in April 2028. Within the case of container vessels, an alternate fee can be imposed (if increased than the tonnage fee) calculated on the idea of containers discharged: beginning at $120 per container, and plateauing at $250 per container.
There are a number of exceptions to the imposition of the charges, together with for vessels arriving to the US empty or in ballast, sure small vessels, sure US-owned vessels, vessels getting into the continental US from a voyage of lower than 2,000 nautical miles, and sure specialised vessels.

Annex III – Price on foreign-built automobile carriers

Starting October 14, 2025, a payment can be imposed on the entry of a non-US-built automobile provider vessel right into a US port at a fee of $150 per Automotive Equal Unit (CEU).

Annex IV – Restriction on LNG exports

Starting April 17, 2028, a minimum of 1% of all LNG supposed for exportation by vessel in a calendar yr have to be exported by a US-built vessel. This proportion will increase yearly, plateauing at 15% in April 2047.

Operation and customary provisions of Annexes

The charges and restrictions imposed by the annexes aren’t cumulative. The order of operation of the Annexes is 1) Annex IV (LNG exports); 2) Annex III (non-US automotive carriers); 3) Annex I (Chinese language homeowners/operators); and 4) Annex IV (Chinese language-built vessels). For instance, a Chinese language-built vessel that’s topic to charges as a result of it has a Chinese language proprietor or operator won’t even be topic to charges on Chinese language-built vessels.
The charges on Chinese language-built vessels and foreign-built automobile carriers, and restrictions on LNG exports, can be suspended for as much as three years if the vessel proprietor orders and takes supply of a US-built vessel of equal or higher capability.
This suspension doesn’t apply to Chinese language-owned or leased vessels.
The charges on Chinese language-owned or operated vessels and Chinese language-built vessels are imposed as much as 5 occasions per vessel per yr. This limitation doesn’t apply to the charges on foreign-built automobile carriers.
The charges on Chinese language-owned or operated vessels and Chinese language-built vessels are assessed for every string of US voyages (so {that a} voyage that includes deliveries at a number of US ports of name in a row would set off solely a single payment). This rule doesn’t apply to the charges on foreign-built automobile carriers.

Notable adjustments to the proposed guidelines

The USTR differs considerably from the foundations that had been proposed in February. Among the many related adjustments are:

The charges at the moment are calculated based mostly on tonnage (or containers delivered/automobile carrying capability) somewhat than per vessel. The charges on Chinese language homeowners and operators are additionally typically increased than the charges on Chinese language-built vessels.
There are a number of exceptions to the charges on Chinese language-built vessels (e.g., small vessels and vessels arriving within the US empty), however the exceptions don’t apply to the charges on Chinese language homeowners and operators.
The exception from the charges on small Chinese language-built vessels applies to vessels with a capability of equal to or lower than: 4,000 Twenty-Foot Equal Models (related for container ships), 55,000 deadweight tons, or a person bulk capability of 80,000 deadweight tons. The reference to “particular person bulk capability” seems to imply that dry bulk carriers with capability of as much as 80,000 deadweight tons are exempt, whereas for different vessels the utmost tonnage capability seems to be 55,000 deadweight tons.
There are not any charges based mostly on the fleet make-up of the proprietor or operator; the main target is on the vessel itself and its proprietor/operator.
The charges on newbuilding orders from Chinese language shipyards have been eradicated.
The charges on automobile carriers apply to any non-US-built vessel, whether or not or not there’s a Chinese language nexus.
The requirement that sure exports be carried on US-built vessels now applies solely to LNG, and solely beginning in 2028. LNG carriers are exempt from the opposite charges.

Whereas the USTR Discover clarifies some uncertainties from the February proposal, important questions stay. Proceed to learn the article right here.