Halt in Fees on Chinese Vessels Endangers U.S. Shipbuilding Efforts

The United States and China called off a fight over commercial shipping on Monday, but the truce could weaken Washington’s efforts to curb China’s rise as a maritime power.

President Trump had recently started imposing fees on Chinese commercial ships when they docked in American ports. The policy was designed to limit the use of Chinese vessels for transporting goods to the United States.

China retaliated with similar levies on American vessels. But the countries agreed to suspend the fees for a year as part of their recent trade pact. They announced on Monday that fee collection had stopped.

The decision to halt the fees showed that Mr. Trump’s efforts to revive American shipyards, which produce almost no large commercial vessels, face obstacles. He has promised a maritime action plan, due last week, to support shipyards and train up mariners.

China made 60 percent of the world’s large vessels in 2024, up from 44 percent five years earlier, according to BRS Shipbrokers. China has produced over 700 large commercial vessels this year and the United States just one, according to BRS.

China’s shipyards, benefiting from significant government support, have in recent years overtaken those of South Korea and Japan, two big shipbuilding nations.

The United States imposed fees not just on Chinese shipping companies, which had been expected to pay hundreds of millions of dollars in levies, but also on large vessels made in China. Many of the largest shipping companies that transport goods to the United States — like France’s CMA CGM — own vessels made in China.

The U.S. fees stemmed from a trade investigation that began under the Biden administration, and they had bipartisan support. Their supporters criticized the Trump administration for putting them on hold.

“We want to blunt China’s dominance of this industry,” said Michael Roberts, a senior fellow at the Hudson Institute, a right-leaning research organization. “So it’s a disappointment in that respect.”

Senator Tammy Baldwin, Democrat of Wisconsin, said in a statement that China’s unfair policies had undercut American shipbuilding workers. “Instead of holding China accountable, the president folded, leaving American workers behind,” she added.

The White House did not respond when asked why it had halted the fees, and whether it had given up too much.

Asked when Mr. Trump’s maritime action plan might appear, Anna Kelly, a White House spokeswoman, said the president had established an “Office of Shipbuilding” and to “stay tuned!”

Supporters of the fees hoped that they would deter shipping companies from buying the Chinese vessels and thus push ship orders to South Korea, Japan and, eventually, the United States.

The ultimate fate of the fees is not clear. The Office of the United States Trade Representative, the agency that formulated the policy, said on Sunday that it would negotiate with China over the issues raised in the investigation that had led to the fees.

“While taking these actions, the United States will continue its domestic efforts and its discussions with key allies and partners on revitalizing American shipbuilding,” the office said in a news release.

A bill in Congress aimed at improving American commercial shipbuilding — called the SHIPS for America Act — intended to use the fees on Chinese ships to subsidize the creation of a new fleet of American cargo vessels.

Asked where the money to finance the fleet would come from if the fee revenue did not exist, Senator Todd Young, Republican of Indiana and a co-sponsor of the bill, said the legislation envisioned other ways to raise money.

“Regardless of whether this suspension moves forward, the SHIPS Act is critical to rebuilding America’s commercial shipping industry and vital to our national security,” Mr. Young said in a statement.

American ships can cost as much as four times those made in Asia, and, as a result, there is little demand for them. The shipping companies that buy large American vessels do so essentially because they have to. The companies transport goods from one American port to another, voyages that, under U.S. law, must be done by American-made ships crewed by Americans.

But there are signs that Mr. Trump’s shipbuilding push is gaining some traction.

Companies from South Korea say they intend to make ships in the United States and invest in American shipyards. Hanwha, a South Korean conglomerate, has said it wants to expand the shipyard in Philadelphia that it bought last year.

When retaliating against the American shipping fees, China said it had put five American subsidiaries of Hanwha on its sanctions list, accusing them of “supporting and assisting” the United States in its moves in the shipbuilding industry.

On Monday, China said it was suspending the sanctions on the Hanwha entities for a year.

“We are aware of China’s Ministry of Commerce’s announcement, and we will continue to work to deliver for our maritime customers around the world,” James Hewitt, a spokesman for Hanwha Global Defense, said in a statement.