The Office of the U.S. Trade Representative on Friday released a Federal Register notice proposing fees on Chinese-connected ships that were not as high as the original proposals that alarmed agricultural exporters, but still pose challenges for the industry. 

In its notice, USTR noted that the fees are in reaction to a Section 301 petition filed by several labor unions “regarding the acts, policies, and practices of China to dominate the maritime, logistics, and shipbuilding sectors.”

National Corn Growers Association President Kenneth Hartman Jr., said, “While we are still working to understand how this new version will impact the corn industry, we believe this final action is more workable than the initial proposal.”

NCGA estimated that the original proposal could have cost corn growers as much as $0.64 per bushel, which translates to 14% higher costs from current price levels. The added cost had the potential to reduce U.S. corn exports and impede market access, the group said.

NCGA explained, “Instead, the released action specifies that fees will be assessed on Chinese vessel operators and Chinese-built ships per voyage, not per port call, as was originally proposed. Additionally, fees cannot be imposed more than five times per year. And short voyages, vessels arriving empty, and vessels carrying less than 50,000 tons will be exempt from the fees.”

“The action will occur in two phases to allow businesses to adjust, and for the first 180 days, applicable fees will be set at zero,” NCGA said.

The International Fresh Produce Association said, “While the USTR’s actions may affect agricultural and perishable products, we appreciate that the revised fee structure appears to take several concerns unique to the agricultural sector into account.”

IFPA noted that USTR will hold a hearing on May 19, and said it will submit formal comments to the agency in advance of that date. 

U.S. Wheat Associates and the National Association of Wheat Growers said, “We appreciate USTR’s understanding of the impact the original proposals could have had on wheat growers and the grain trade. The uncertainty about the proposals was already causing problems for overseas customers, who were hesitant to make purchases with additional port fees looming.”

American Association of Port Authorities President and CEO Cary Davis said, “America’s ports appreciate the Trump administration’s willingness to incorporate industry’s concerns in their efforts to counter China’s dominance in the maritime space.”

“This policy will, however, still drive up the cost of shipping, reduce volume through our nation’s trade gateways, and make goods, especially automobiles, more expensive for everyday American consumers,” Davis said.

Davis said the policy will likely severely impact automobiles, particularly due to an additional 100% tax on cargo handling equipment (CHE). 

AAPA will submit comments to USTR and encourage ports to contact their Congressional delegations opposing new CHE tariffs and instead champion legislation to create a production tax credit for domestically produced CHE, which would be necessary to incentivize reshoring, Davis said.

Sen. Roger Marshall, R-Kan., said in a news release, “Thanks to President Trump and U.S. Trade Representative Jamieson Greer for putting America first by placing industry-friendly service fees on Chinese-manufactured ships that carry U.S. farm commodities.”

“China has dominated global shipping fleets for too long,” Marshall said. “This move protects American agriculture, boosts domestic shipbuilding, and strengthens our national security.”