Ocean | China Responds to USTR’s Section 301 “Service Fee” Regime with Reciprocal Port Fees

China’s Reciprocal Port Fees

A new fee on US-owned, flagged or operated vessels

Under the Implementation Measures, China has now imposed special port fees on US vessels, calculated based on the vessel’s net tonnage. The measures apply to ships that are US-owned, US-built, US-flagged, or operated by US entities, largely mirroring the scope of the US service fee regime.

The new Chinese port fees will apply to:

• Vessels owned or operated by US enterprises, organizations or individuals;
• Vessels in which US enterprises, organizations or individuals directly or indirectly hold 25% or more of the equity, voting rights, or board seats;
• US-flagged vessels; and
• Vessels constructed in the US.

Importantly, exemptions are provided for vessels built in China, as well as vessels entering Chinese shipyards for repair. The legislation also permits remittance of port fees for “other ships recognized as exempt”, suggesting potential flexibility for further exclusions under specific circumstances. The fees will be charged on a per-voyage basis and collected only at the vessel’s first Chinese port of call, with a maximum of five chargeable calls per vessel per year. The rates will be introduced in phases, beginning on 13 October 2025 at CNY 400 (USD 56) per port call, followed by annual increases until it reaches CNY 1,120 (USD 157) from 17 April 2028 onwards.

The reporting form that must be completed by every ship upon arrival has also been issued. This is a self-declaration form which vessels must complete seven days prior to entering China. Owners and operators must consider whether they meet the criteria set out in the Implementation Measures.

The enforcement provisions under the Implementation Measures are currently limited in severity and primarily focused on ensuring compliance. Where a vessel provides false or incomplete information, Chinese authorities may direct the shipowner or its agent to amend or supplement the report to ensure compliance. Vessels that fail to pay the required port fees will be denied port entry or clearance, preventing departure or further port operations until payment is made. For vessels that evade payment and have already departed Chinese ports, the authorities may require settlement of outstanding fees, including any late payment, before the vessel’s next entry into a Chinese port.

The 25% US ownership threshold

A key element of China’s new port fee regime is the 25% US ownership threshold. As noted above, port fees will also apply to vessels that are:

owned or operated by enterprises, other organizations, and other organizations in which U.S. enterprises, other organizations, and individuals directly or indirectly hold 25% or more of the equity (voting rights, board seats)

The provision is broadly framed, and it has been discussed whether the wording intends to capture all US ownership interests in aggregate, thereby targeting US economic participation in general, rather than the entity exercising direct or indirect control over the vessel. This approach diverges from the ultimate beneficial ownership (“UBO”) standards typically used in similar regulatory frameworks. The US regulation is also based on similar principles and captures all Chinese ownership interests in aggregate.

However, the official English version of the reporting form may give rise to an alternative interpretation. In the form, shipping companies are asked to inform whether the vessel is “owned by, controlled by, or operated by an entity with 25 percent or more of this entity’s equity interest, outstanding voting interest, or board seats held directly or indirectly by an entity, other organization, or a citizen of the U.S.” (emphasis added). The reporting form may therefore suggest that the ownership threshold will be based on a single entity, an approach which better aligns with the UBO-style interpretation. However, it is not clear whether it was intended for the reporting form to constitute a clarification of the regulation.

As of now, the Chinese authorities have not confirmed the correct interpretation of this ownership threshold, even though the port fee regime has already entered into effect.

Current Status of the USTR Section 301 “Service Fee” Proposal

As previously noted, the original Section 301 proposal published in April 2025 introduced broad “service fees” on Chinese-built and Chinese-operated vessels calling at US ports, as well as potential restrictions on LNG export licenses for operators using non-US-built tonnage. It also included a fixed USD 150 per car-equivalent unit fee on all foreign-built car carriers.

Following extensive industry feedback, the USTR released a revised draft on 6 June 2025, followed by a further update on 10 October 2025 which confirmed parts of the proposal while modifying certain key elements of the original action following industry concerns. Across the two revisions, the USTR:

• Replaced the fixed per-unit car-carrier fee with a tonnage-based model, ultimately confirming a rate of USD 46 per net ton, effective 14 October 2025;
• Removed the proposed LNG export license suspension mechanism for foreign-built LNG vessels (retroactive to 17 April 2025);
• Introduced exemptions for vessels available for military use under the US Maritime Security Program;
• Imposed 100% tariffs on certain ship-to-shore cranes and proposed duties of up to 150% on related cargo-handling equipment (with comments due 12 November 2025);
• Added a carve-out for ethane and LPG carriers under long-term charter; and
• Deferred the first service-fee payments until 10 December 2025 for certain vessel types (including vehicle/Ro-Ro vessels).

The level of USD 46 per net ton has particularly caught the industry by surprise, representing a material additional cost for all car carriers calling at US ports – regardless of whether they are Chinese-built or not.

In sum, the USTR has largely maintained the core features of its April proposal.

BAHR continues to monitor developments regarding both the USTR measures and the reciprocal Chinese legislation and will provide updates as further details emerge.