The United States has decided to suspend port fees that targeted China's shipping industry for one year, starting November 10. This move comes after a trade agreement made between President Trump and Chinese President Xi Jinping. The fees were in effect for less than a month and were considered crucial by labor unions for reviving American shipbuilding.
In response, China has also suspended its counteractions against vessels linked to the U.S. This mutual agreement, which will last until November 9, 2026, was a result of discussions at the Trump-Xi summit held in South Korea last month.
The suspension specifically affects fees under Annexes I, II, and III aimed at Chinese-owned vessels, operators of ships built in China, and foreign-built vehicle carriers. Additionally, proposed tariffs on Chinese-made ship-to-shore cranes and cargo handling equipment are also on hold.
The Section 301 Investigation
The port fees were based on a Section 301 petition submitted in March 2024 by the United Steelworkers and their labor partners. They accused China of using unfair industrial policies and excessive state subsidies to dominate the global shipbuilding market. After an investigation, the U.S. Trade Representative concluded in January 2025 that China's shipbuilding practices were "unreasonable" according to U.S. trade law.
Katherine Tai, former U.S. Trade Representative, pointed out that the U.S. ranks 19th globally in commercial shipbuilding, constructing fewer than five ships a year, while China produces over 1,700 annually.
Washington began implementing these fees on October 14, 2025, so they were active for less than four weeks before the suspension took place.
Mixed Reactions From the Industry
Many maritime organizations welcomed the suspension. Mike Jacob, President of the Pacific Merchant Shipping Association, remarked that this pause would allow ongoing discussions to continue. Lasse Kristoffersen, President and CEO of Wallenius Wilhelmsen, said it was a "reasonable step" that would enable U.S. shipyards and supply chain partners to plan investments more confidently.
On the other hand, labor unions expressed strong disapproval of the decision. A joint statement from the USW, IAM Union, IBEW, and IBB lamented that "workers, shipyards, and our broader economic and national security interests are once again being sidelined for short-term benefits."
They added that despite previous strong statements about the need for a comprehensive approach to enhance American maritime strength, these interests are being neglected again.
Hunter Stires, a Non-Resident Fellow at the Center for Maritime Strategy, labeled the suspension as "a significant strategic mistake." Scott Paul, President of the Alliance for American Manufacturing, raised concerns about whether negotiations could effectively address China's "predatory actions," given its history of noncompliance.
Concerns About Shipbuilding Revival
This suspension brings up important questions regarding the administration's overall maritime strategy. The port fees were meant to support the Trump administration's efforts to strengthen American shipbuilding and maritime power.
Ambassador Greer, a Trump appointee, stated that "ships and shipping are essential for American economic security and the smooth flow of commerce." He believed that the actions taken by the Trump administration would help diminish China's dominance, tackle threats to the U.S. supply chain, and signal a demand for U.S.-built ships.
The fees were part of the administration's "Restoring America’s Maritime Dominance" executive order and the proposed SHIPS for America Act. Maritime experts describe this as the most significant reform for U.S. maritime policy since 1970.
With the trade enforcement currently on hold, the administration will now depend on negotiations with China and partnerships with allies. The U.S. has secured commitments for substantial investments in U.S. shipbuilding, with Japan pledging $500 billion and South Korea committing $150 billion.
During the short time the fees were active, operators in China faced the highest penalties. U.S. carrier Matson reported incurring $6.4 million in reciprocal fees from China over three weeks, while China's state-owned COSCO faced an estimated $1.5 billion in annual U.S. port fees.
Despite the impending fees, China has maintained its lead in global shipbuilding. According to Roy Houseman, legislative Director for the United Steelworkers, China accounted for 53% of all global ship orders by tonnage during the first eight months of 2025, highlighting an unhealthy trend in the market for an industry so vital to global trade.
The U.S. Trade Representative has stated it will keep an eye on the situation and consider whether to extend the suspension or take further steps before the November 10, 2026 deadline.