Proposed US port fees on China-built ships begin choking agriculture exports
President Donald Trump’s plan to revive U.S. shipbuilding using massive fees on China-linked ship visits to American ports is causing U.S. coal inventories to swell and stoking uncertainty in the embattled agriculture market, as exporters struggle to find ships to send goods abroad.
Trump is drafting an executive order that would rely on funding from a U.S. Trade Representative proposal to levy fines of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China.
Those potential port fees have limited the availability of ships needed to move agriculture, energy, mining, construction and manufactured goods to international buyers, according to major U.S. exporters and transportation providers in interviews with Reuters, letters to U.S. officials, and comments ahead of USTR hearings next week.
Vessel owners have already refused to provide offers for future U.S. coal shipments due to the proposed USTR fees, Xcoal Energy & Resources CEO Ernie Thrasher said in a letter to U.S. Department of Commerce Secretary Howard Lutnick dated March 12 and seen by Reuters.
Enacting and implementing those fees could cease exports of U.S. coal within 60 days, putting $130 billion worth of shipments at risk, Thrasher said. He said the fee structure could add up to 35% to the delivered cost of U.S. coal, making it uncompetitive on the global market.
“The loss of direct and indirect jobs would be catastrophic,” said Thrasher, who confirmed sending the letter and said he has not received a response.
The letter from Pennsylvania-based coal marketer Xcoal and comments from agriculture representatives showing tangible impacts from the proposed fees have not previously been reported.
Coal mines in West Virginia are also preparing to lay off miners as unsold coal inventories pile up, Chris Hamilton, CEO of the West Virginia Coal Association, told Reuters.
He did not provide specifics.
The proposed fees could also make it harder for the U.S. to export other energy products like oil, liquefied natural gas, and refined fuels, the American Petroleum Institute, the powerful oil industry lobbying group, said in comments submitted to the USTR dated Mar. 10.
The USTR proposal also seeks to shift domestic exports to ships that are both flagged and built in the United States. The current fleet of U.S.-flagged cargo vessels numbers less than 200, and not all are U.S. built.
Very few maritime operators will be able to document that their annual share of U.S. exports meets the required 20% carried on U.S. built, U.S flagged vessels, shipping association BIMCO said in USTR comments dated March 17.
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