The United States and China have decided to pause retaliatory port fees on each other’s ships for one year. This is a major step back from a key strategy of the Trump administration aimed at challenging China's dominance in shipbuilding.

This suspension is part of a larger trade agreement between these two major economies. On Thursday, U.S. President Donald Trump announced he reached an agreement with President Xi Jinping. In exchange for reducing tariffs on Chinese goods, China has agreed to take action against illegal fentanyl trade, resume purchases of U.S. soybeans, and continue exporting rare earth materials. Their talks took place in Busan, South Korea—the first time the two leaders have met since 2019—concluding Trump's tour of Asia, which included trade deals with South Korea, Japan, and other Southeast Asian nations.

The U.S. began charging additional fees on Chinese-linked vessels at its ports starting October 14, following a broader investigation by the Office of the U.S. Trade Representative into China’s shipbuilding sector, which was started by the Biden Administration in 2024. The U.S. has now agreed to pause actions resulting from this investigation for a year, according to China's Ministry of Commerce.

Following the U.S. suspension, China will also stop its countermeasures against the U.S. for one year, which included fees on American ships that started on the same day as the U.S. measures, the ministry reported.

The announcement was made shortly after U.S. Trade Representative Jamieson Greer reiterated that the administration aims to boost American shipbuilding. "We’re trying to rebuild shipbuilding," he said while on Air Force One when asked about the agreement on port fees during the meeting in South Korea.

This suspension provides some relief to shipping companies affected by rising maritime trade tensions. The back-and-forth fees have disrupted global shipping operations—leading to higher costs, fleet changes, and even management shakeups. These fees are part of a bigger competition as the U.S. aims to challenge China’s grip on shipbuilding.

Industry organizations welcomed the suspension. The International Chamber of Shipping expressed hope to receive more confirmation and details on the reports, which have yet to be confirmed by USTR officials. "The U.S. agreement to suspend the Section 301 port fees on China’s maritime, logistics, and shipbuilding sectors for a year, along with the agreed suspension of China’s countermeasures against U.S.-linked ships, is a positive development," the organization stated.

While the ICS supports efforts to enhance U.S. shipbuilding capacity, it emphasized that the port fees have already created substantial challenges and disruptions for the shipping sector and global trade.

Joe Kramek, President and CEO of the World Shipping Council, noted, "Global trade operates best when it can flow freely, and suspending ship fees from both the U.S. and China benefits farmers, exporters, and consumers alike. It helps maintain competitive trade and ensures access to vital shipping routes."

However, labor unions have raised concerns about the future of U.S. maritime policy. Roy Houseman, Legislative Director of the United Steelworkers, pointed out that the "truce" halting the 301 port fees on vessels from China leaves many questions unanswered regarding U.S. efforts to revitalize its domestic commercial shipbuilding. During the first eight months of 2025, China received 53% of all global ship orders by tonnage.

The USTR port fees were a key part of the Trump administration's broader goal to restore American shipbuilding and maritime capabilities. These fees originated from a Section 301 investigation into China's unfair shipbuilding practices—initiated by U.S. labor unions—and were intended to discourage reliance on Chinese-built vessels while promoting investment in U.S. shipyards.

According to Ambassador Greer, a Trump appointee, "Ships and shipping are crucial to America’s economic security and the free flow of commerce. The Trump administration's actions aim to reduce Chinese dominance and protect the U.S. supply chain, while encouraging demand for U.S.-made ships."

The fees are part of the administration's "Restoring America’s Maritime Dominance" executive order and the proposed SHIPS for America Act in Congress. Together, these measures create a three-part strategy involving executive action, trade enforcement through port fees, and legislative investment via the SHIPS Act. This is seen as the most significant U.S. maritime policy reform since 1970, as noted by Sal Mercogliano, a former U.S. Merchant Marine officer and creator of the What’s Going On With Shipping YouTube channel, who testified before Congress recently.

Efforts to impose port fees began in March 2024 when a coalition led by the United Steelworkers urged the USTR to investigate China’s shipbuilding activities. By January 2025, the USTR had determined that China’s state support for shipbuilding and related services constituted unfair trade practices, which led to an executive order in April 2025 and the introduction of the SHIPS Act.

The final Section 301 action was announced on April 17, imposing port fees on Chinese-linked ships along with other maritime and industrial measures, including new tariffs on Chinese-made equipment and changes to fees for foreign-built transport vessels.

However, questions remain unanswered, according to Brian Maloney, a partner in Seward & Kissel’s Maritime & Transportation Group, as the USTR has yet to disclose details of the suspension. "Will this apply to other foreign vehicle carriers, or just to the fees for Chinese-related vessels? When will the pauses take effect, and will either country offer retroactive relief from October 14?"

The one-year suspension raises uncertainty about the long-term direction of the administration’s maritime and shipbuilding strategies—whether it signifies a real change or simply delays policies aimed at reshaping global shipping to favor American shipyards. For now, though, the pause has eased tensions in the global shipping industry.