October 16th, 2025 – China announced that it will exempt U.S.-flagged ships built in China from newly implemented port fees offering relief to carriers such as Matson and APL that operate China-built vessels under the U.S. flag. Maersk Line Ltd., another major U.S. carrier, remains largely unaffected since it does not regularly serve Chinese ports.
The move comes amid mounting maritime tensions as the U.S. and China impose reciprocal port charges on each other’s vessels. The U.S. now charges Chinese-owned or -operated ships $50 per net ton on initial port calls, capped at five visits per year, while foreign owners operating China-built ships face the higher of $18 per ton or $120 per discharged container, with rates set to rise next April. China has responded with a $56-per-ton fee on non-China-built vessels that are U.S.-flagged or owned by American companies, or firms with over 25% U.S. ownership.
Broader Retaliatory Measures
Alongside the fee exemption, Beijing announced sanctions on U.S. subsidiaries of South Korea’s Hanwha Group, accusing them of supporting U.S. efforts to revive its shipbuilding industry. The Commerce Ministry described the sanctions as retaliation for a U.S. probe into Chinese trade practices that allegedly gave Beijing an unfair edge in global shipping and shipbuilding. The sanctions bar Chinese entities from doing business with five Hanwha Ocean subsidiaries in the U.S.
The timing aligns with the rollout of mutual port fees, underscoring escalating trade friction. Shipping analyst Clarkson’s estimates that China’s port fees could affect around 500 vessels worldwide—about 5% of container ships and up to 13% of oil and LNG tankers calling at Chinese ports.
Hanwha, which bought Philadelphia’s shipyard in 2024 for $100 million, announced a $5 billion plan to modernize the facility and ordered ten tankers for U.S. Jones Act service. The company also exited a Chinese joint venture earlier this year, signaling a strategic shift toward the American market.
Trade, Tariffs, and Economic Context
China’s Transport Ministry has opened an investigation into how U.S. Section 301 port charges and tariffs impact its maritime and shipbuilding industries, as well as individuals or organizations involved in what it calls “discriminatory measures” by the U.S. Trade Representative.
At the same time, U.S. investment bank JPMorgan announced it will facilitate $1.5 trillion in infrastructure investments over the next decade, including in shipbuilding—part of a broader American effort to strengthen domestic industry and reduce reliance on foreign manufacturing.
The new tensions come as President Donald Trump and Chinese leader Xi Jinping prepare to meet at a global trade summit later this month. Their meeting follows a temporary pause in retaliatory tariffs set to expire November 10th. In the meantime, China imposed new restrictions on key minerals, prompting Trump to threaten 100% tariffs beginning November 1st. Chinese customs data shows exports to the U.S. fell 27% in September, marking six consecutive months of decline.
Industry Impact
The first Chinese-operated vessels to face the new U.S. port charges—the 16,828-TEU OOCL Sunflower in Long Beach and the 13,800-TEU Cosco Jasmine in Savannah—highlighted the immediate effects of the policy. Smaller vessels or those under the U.S. flag were exempt. Meanwhile, Matson’s Manukai, an 11,149-ton container ship built in Philadelphia, became the first U.S.-flagged vessel to face China’s reciprocal port charges when it called Ningbo on Tuesday—totaling more than $600,000.
The Gemini Cooperation, a partnership between Maersk and Hapag-Lloyd, has rerouted two U.S.-flagged vessels in its trans-Pacific service to avoid China’s new retaliatory port fees. The carriers announced that the Potomac Express and Maersk Kinloss will bypass Ningbo, instead discharging and transshipping cargo through South Korean ports such as Busan and Kwangyang. China’s $56-per-net-ton fee on U.S.-flag ships not built in China—estimated at about $2.5 million per vessel per call—prompted the diversion. Hapag-Lloyd’s North American president, Stuart Sandlin, said the company’s five U.S.-flagged, South Korean-built vessels could face as much as $125 million annually in Chinese port fees, forcing the carrier to reassess how it splits government and commercial cargo. Currently, the U.S.-flag international fleet includes 57 ships, with Matson’s Waikiki recently incurring a $1.7 million fee upon calling Shanghai. Among U.S. carriers, only CMA CGM’s APL fleet consists entirely of China-built vessels exempt from the new charges.
Labor unions that initiated the USTR’s investigation praised the new fees as a critical step toward rebuilding U.S. shipbuilding capacity, creating jobs, and strengthening national defense. However, trade associations representing importers voiced concern over potential surcharges from carriers. The American Apparel & Footwear Association urged policymakers to focus on long-term domestic incentives rather than punitive fees that could raise costs and divert business away from U.S. ports.
