[Federal Register Volume 90, Number 77 (Wednesday, April 23, 2025)]
[Notices]
[Pages 17114-17125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-06927]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Notice of Action and Proposed Action in Section 301 Investigation
of China's Targeting the Maritime, Logistics, and Shipbuilding Sectors
for Dominance, Request for Comments
AGENCY: Office of the United States Trade Representative (USTR).
ACTION: Notice of action and proposed action, request for comments, and
notice of public hearing.
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SUMMARY: The U.S. Trade Representative has determined that appropriate
action in this investigation includes: certain services fees on the
maritime transport services of Chinese operators and shipowners; on
maritime transport services of operators using Chinese-built vessels to
be applicable on a non-discriminatory basis; certain service fees on
the maritime transport services of operators of foreign-built vehicle
carriers to be applicable on a non-discriminatory basis; and
restrictions on certain maritime transport services for U.S. Liquified
Natural Gas (LNG) to be applicable on a non-discriminatory basis. In
addition, the U.S. Trade Representative is proposing additional tariffs
on certain ship-to-shore cranes on a non-discriminatory basis, and
proposing additional tariffs on certain other cargo handling equipment
of China. USTR requests written comments regarding the proposed tariff
actions set forth in this notice and will convene a public hearing in
relation to the proposed tariffs.
DATES: Dates applicable to fees on certain maritime transport services
are contained in Annexes I, II, and III.
Dates applicable to restrictions on certain maritime transport are
contained in Annex IV.
Dates applicable to Proposed Tariffs:
April 17, 2025: Comment period opens.
May 8, 2025: To be assured of consideration, submit requests to
appear at the hearing on proposed tariff actions, along with a summary
of the testimony, by this date.
May 19, 2025: To be assured of consideration, submit written
comments on the proposed tariff actions by this date. USTR will hold a
public hearing on the proposed tariff actions in the main hearing room
of the U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, beginning at 10 a.m. If necessary, the hearing
may continue on subsequent days.
[[Page 17115]]
Seven calendar days after the last day of the public hearing:
Submit post-hearing rebuttal comments on the proposed tariff actions.
ADDRESSES: Submit documents in response to the proposed tariff actions
in this notice, including written comments, rebuttal comments, and
requests to appear through USTR's electronic portal: https://comments.ustr.gov/s/. The docket number for written comments and
rebuttal comments on the proposed tariff actions is USTR-2025-0008. The
docket number for requests to appear at the public hearing on the
proposed tariff actions is USTR-2025-0009.
FOR FURTHER INFORMATION CONTACT: For procedural questions concerning
comments or participating in the public hearing on the proposed tariff
actions, contact the USTR Section 301 support line at (202) 395-5725.
Direct all other questions regarding this notice to: Megan Grimball and
Philip Butler, Chairs of the Section 301 Committee; Thomas Au,
Associate General Counsel; or Henry Smith, Anjani Nadadur, or David
Salkeld, Assistant General Counsels at (202) 395-5725.
SUPPLEMENTARY INFORMATION:
A. Background
On March 12, 2024, petitioners \1\ filed a Section 301 petition
regarding the acts, policies, and practices of China to dominate the
maritime, logistics, and shipbuilding sectors. The petition was filed
pursuant to Section 302(a) of the Trade Act of 1974, as amended (Trade
Act) (19 U.S.C. 2412(a)), requesting action pursuant to Section 301(b)
of the Trade Act (19 U.S.C. 2411(b)). See 89 FR 29424 (April 22, 2024).
For additional information, the full text of the petition and
accompanying exhibits are available at: https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-china-targeting-maritime-logistics-and-shipbuilding-sectors-dominance.
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\1\ The five labor union petitioners are: the United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial
and Service Workers International Union, AFL-CIO CLC (USW), the
International Brotherhood of Electrical Workers (IBEW), the
International Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers, AFL-CIO/CLC (IBB), the
International Association of Machinists and Aerospace Workers (IAM),
and the Maritime Trades Department of the AFL-CIO (MTD).
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On April 17, 2024, after consultations with the appropriate
advisory committees and the Section 301 Committee, the U.S. Trade
Representative initiated an investigation of China's acts, policies,
and practices targeting the maritime, logistics, and shipbuilding
sectors for dominance. See 89 FR 29424 (April 22, 2024).\2\ The U.S.
Trade Representative also requested consultations with the government
of China pursuant to Section 303 of the Trade Act (19 U.S.C. 2413).\3\
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\2\ The notice of initiation solicited written comments. The
public submissions are available at: https://comments.ustr.gov/s/,
docket number USTR-2024-0005. USTR and the Section 301 Committee
convened a public hearing on May 29, 2024, during which witnesses
provided testimony. A transcript of the hearing is available on the
USTR website at: https://ustr.gov/sites/default/files/Hearing%2005292024.pdf.
\3\ The government of China declined to hold consultations
regarding the investigation under this statutory framework.
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Based on the information obtained during the investigation, on
January 16, 2025, USTR released a public report on the investigation.
The ``Report on China's Targeting of the Maritime, Logistics, and
Shipbuilding Sectors for Dominance'' (Report) supports the
determination that China's targeting of the maritime, logistics, and
shipbuilding sectors for dominance is unreasonable and burdens or
restricts U.S. commerce and thus is actionable. The Report is available
on USTR's website at: https://ustr.gov/sites/default/files/enforcement/301Investigations/USTRReportChinaTargetingMaritime.pdf.
As detailed in the Report, for nearly three decades, China has
targeted the maritime, logistics, and shipbuilding sectors for
dominance and has employed increasingly aggressive and specific targets
in pursuing dominance. China's dominance severely disadvantages U.S.
companies, workers, and the U.S. economy generally, through lessened
competition and commercial opportunities and through the creation of
economic security risks from dependencies and vulnerabilities.
Top-down industrial planning and targeting is a critical feature of
China's state-led, non-market economic system. China organizes the
development of its economy at a high level through broad, national-
level, five-year economic and social development plans. It then employs
industry-specific plans that typically align chronologically with the
national five-year plans. These plans often contain detailed
quantitative and qualitative targets, including for production,
domestic content, and domestic and international market shares, and
outline the non-market policies and practices China should use to
achieve these targets. China's plans reveal its targeting of the
maritime, logistics, and shipbuilding sectors for dominance.
Market share targets necessitate substitution by Chinese companies
at the expense of foreign competitors--for Chinese companies to gain
market share, they must displace foreign companies in existing markets
and take new markets as they develop in the future. China's industrial
targets have become more aggressive and sophisticated over the years.
China's targeting of these sectors for dominance has undercut
competition and taken market share with dramatic effect: raising
China's shipbuilding market share from less than five percent of global
tonnage in 1999, to over 50 percent in 2023; increasing China's
ownership of the commercial world fleet to over 19 percent as of
January 2024; and controlling production of over 70 percent of ship-to-
shore cranes, 86 percent of intermodal chassis, 95 percent of shipping
containers, and increasing shares of other components and products.\4\
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\4\ See, e.g., USTR's report on China's Targeting of the
Maritime, Logistics, and Shipbuilding Sectors for Dominance at vii,
x, 17, 49, 54, 58.
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Based on the information obtained during the investigation, as
reflected in the Report on the investigation, and taking into account
public comments, as well as the advice of the Section 301 Committee and
appropriate advisory committees, the U.S. Trade Representative
determined that China's targeting of the maritime, logistics, and
shipbuilding sectors for dominance is unreasonable and burdens or
restricts U.S. commerce, and thus is actionable under Sections 301(b)
and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a)). See 90 FR
8089 (January 23, 2025).
In particular, the U.S. Trade Representative determined that
China's targeting of the maritime, logistics, and shipbuilding sectors
for dominance is unreasonable because it displaces foreign firms,
deprives market-oriented businesses and their workers of commercial
opportunities, and lessens competition, and creates dependencies on
China, increasing risk and reducing supply chain resilience. China's
targeting for dominance also is unreasonable because of China's
extraordinary control over its economic actors and these sectors.
Furthermore, the U.S. Trade Representative determined that China's
targeting of the maritime, logistics, and shipbuilding sectors for
dominance burdens or restricts U.S. commerce by undercutting business
opportunities for and investments in the U.S. maritime, logistics, and
shipbuilding sectors; restricting competition and choice; creating
economic security risks from dependence and vulnerabilities in sectors
critical to the functioning of the
[[Page 17116]]
U.S. economy; and undermining supply chain resilience.
On February 21, 2025, the U.S. Trade Representative proposed that
action was appropriate and to take responsive action in the form of
service fees against certain maritime transport services of China. USTR
also proposed that certain maritime transport service fees and
restrictions would be applicable on a nondiscriminatory basis. See 90
FR 10843 (February 27 notice). USTR proposed certain service fees on:
(1) Chinese maritime transport operators, (2) maritime transport
operators with fleets comprised of Chinese-built vessels, and (3)
maritime transport operators with prospective orders for Chinese
vessels. USTR also proposed to refund fees paid by maritime transport
operators per entry of a U.S.-built vessel through which the operator
is providing international maritime transport services. USTR proposed
certain restrictions on international maritime transport of U.S. goods,
and sought public comment on other actions to reduce the exposure and
risks from China's promotion of LOGINK and similar platforms.
USTR requested public comments with respect to: the level of the
burden or restriction on U.S. commerce arising from China's targeting
of the maritime, logistics, and shipbuilding sectors for dominance; the
appropriate trade to be covered by responsive actions, including the
type and level; and whether the proposed fees or restrictions on
services are appropriate, including the type of services to be subject
to fees or restrictions, the level of fees or restrictions, the
structure of any fees, restrictions, or reimbursement of fees on
services. In commenting on proposed actions, USTR requested commenters
specifically address whether a proposed action would be practicable or
effective to obtain the elimination of China's acts, policies, and
practices.
USTR established an electronic portal to receive public comment on
the proposals and held a two-day public hearing on March 24 and 26,
2025. See February 27 notice. USTR received nearly 600 comments in the
response to the notice, and nearly 60 individuals participated in the
public hearings.
On April 9, 2025, the President issued Executive Order 14269,
``Restoring America's Maritime Dominance.'' With respect to the actions
to be taken in this investigation, if any, Section 5 of the Executive
Order directs the U.S. Trade Representative to: (i) coordinate with
appropriate agencies to collect additional information, as appropriate
and to the extent permitted by law, in support of administering such
actions; and (ii) coordinate with the Attorney General and Secretary of
Homeland Security to take appropriate steps to enforce any restriction,
fee, penalty, or duty imposed pursuant to such actions. Additionally,
as part of the actions in this investigation, Executive Order 14269
directs the U.S. Trade Representative to consider proposing: (i)
tariffs on ship-to-shore (STS) cranes manufactured, assembled, or made
using components of PRC origin, or manufactured anywhere in the world
by a company owned, controlled, or substantially influenced by a PRC
national; and (ii) tariffs on other cargo handling equipment.
Executive Order 14269 also describes additional policies to broadly
address China's targeting of the maritime, logistics, and shipbuilding
sectors for dominance, including the creation of a Maritime Action Plan
(Section 3); the engagement of allies and partners to align trade
policies, including with respect to this investigation (Section 7);
efforts to reduce dependence on adversaries by recommending incentives
for shipbuilders in allied nations to undertake capital investment in
the United States (Section 8); and the development of a legislative
proposal for a maritime security trust fund that considers using
revenue, including from this action, to establish a reliable, dedicated
funding source for programs under the Maritime Action Plan (Section 9).
Executive Order 14269 is available at the following address:
https://www.federalregister.gov/documents/2025/04/15/2025-06465/restoring-americas-maritime-dominance.
B. Determination of Action
On January 16, 2025, USTR issued a notice which announced the U.S.
Trade Representative's determination that China's acts, policies, and
practices under investigation are unreasonable or discriminatory and
burden or restrict U.S. commerce, and are thus actionable under section
301(b) of the Trade Act. Section 301(b) of the Trade Act provides that
upon determining that the acts, policies, and practices under
investigation are actionable and that action is appropriate, the U.S.
Trade Representative shall take all appropriate and feasible action
authorized under Section 301(c) of the Trade Act, subject to the
specific direction, if any, of the President regarding such action, and
all other appropriate and feasible action within the power of the
President that the President may direct the U.S. Trade Representative
to take under section 301(b) of the Trade Act, to obtain the
elimination of those acts, policies, or practices.
Section 301(c)(1)(B) of the Trade Act authorizes, the U.S. Trade
Representative to ``impose duties or other import restrictions on the
goods of [the foreign country subject to the investigation] and,
notwithstanding any other provision of law, fees or restrictions on the
services of, [the foreign country subject to the investigation].''
Sections 301(c)(3)(A) and (B) of the Trade Act provide further
authority for the U.S. Trade Representative to take any of the actions
he is authorized to take under section 301(b) against any good or
economic sector, on a non-discriminatory basis or solely against the
foreign country concerned, and without regard to whether such goods or
economic sector were involved in the act, policy, or practice under
investigation.
USTR and the Section 301 Committee have carefully reviewed the
public comments and the testimony from the two-day public hearing
regarding the proposed actions. USTR has also considered the advice of
advisory committees and consulted with the agencies which regulate the
services involved. Considering the comments and advice, and pursuant to
sections 301(b), 301(c), and 304(a) of the Trade Act (19 U.S.C.
2411(b), 2411(c), and 2414(a)), the U.S. Trade Representative has
determined that action is appropriate, and that appropriate and
feasible action in this investigation includes the actions as provided
for in Annexes I, II, III, and IV to this notice. The actions are
summarized below for convenience purposes.\5\ The following actions are
not cumulative. That is, either a vessel is subject to the fees set
forth in Annexes I, II, or III, or, a vessel is subject to the
requirement of Annex IV. If any fee is applied, only one fee will be
applied under the terms of the respective Annex.
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\5\ In the event of any conflict between the summary text and
Annex I, II, III, or IV, the text of the respective Annex controls.
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Fees on Maritime Transport Services
Phased fee on Chinese vessel operators and vessel owners.
This fee, based on the net tonnage of the vessel, is assessed against
any vessel with a Chinese operator or owned by an entity of China, as
set out in Annex I. If a vessel makes multiple U.S. entries before
transiting to a foreign destination, this fee is assessed per rotation
or string of U.S. port calls. The fee will be set at $0 for the first
180 days, will then be set at $50/NT, and will increase incrementally
over the next three years.
[[Page 17117]]
Phased fee on Chinese-built vessels. This fee is based on
the higher of (i) a fee based on the net tonnage of the vessel, or (ii)
a fee based on per container. If a vessel makes multiple U.S. entries
before transiting to a foreign destination, this fee is assessed per
rotation or string of U.S. port calls. The fee will be set at $0 for
the first 180 days and increases incrementally over the next three
years, as described in Annex II. Certain Chinese-built vessels are not
subject to the fee, including: certain vessels enrolled in certain U.S.
Maritime Administration programs (e.g., the Maritime Security Program
and Tanker Security Program); vessels arriving empty or in ballast;
vessels below certain size or capacity thresholds; vessels engaged in
short sea shipping (i.e., voyages of less than 2,000 nautical miles
from certain U.S. ports); certain U.S.-owned companies' vessels; and
certain specialized export vessels. A vessel operator is eligible for a
fee remission for up to three years if it orders and takes delivery of
a U.S.-built vessel of equivalent size.
Phased fee on vessel operators of foreign vehicle
carriers. This fee is assessed on any foreign-built vehicle carrier
based on its Car Equivalent Unit (CEU) capacity, as set out in Annex
III. The fee will be set at $0 for 180 days, and will then be set at
$150 per CEU capacity of the entering non-U.S. built vessel. An
operator could receive a fee remission for up to three years if it
orders and takes delivery of a U.S.-built vessel of equivalent or
greater capacity within that time period. A vessel operator will be
eligible for a fee remission for three years if it orders and takes
delivery of a U.S.-built vessel of at least equivalent size.
Restrictions on Services To Promote the Transport of U.S. Goods on U.S.
Vessels
Restrictions on certain maritime transport. After three
years, USTR would impose a restriction to require the use of U.S.
vessels for the maritime transport of a certain percentage of LNG
exports, as set out in Annex IV. An operator or its non-compliant LNG
vessel may be licensed to operate for up to three years as if the
requirement is met, if that operator orders and takes delivery of a
U.S.-built LNG vessel of equivalent or greater capacity within that
time period. USTR will consult with the U.S. Department of Energy and
other agencies, as appropriate, to provide notice and further technical
information regarding this restriction.
Actions Directed by the President in Executive Order 14269, ``Restoring
America's Maritime Dominance''
Consistent with the President's direction in Executive Order 14269,
``Restoring America's Maritime Dominance,'' the U.S. Trade
Representative is proposing additional duties on STS cranes, in a
manner consistent with the description in the Executive Order, and on
containers and certain chassis of China, consistent with the Executive
Order 14269's direction regarding other cargo handling equipment of
China, to include headings and subheadings 8609.00.00, 8716.39.0090,
8716.90.30, and 8716.90.50.
C. Responses to Significant Comments Regarding the Proposed Actions
Below USTR responds to comments that raise significant issues. USTR
prepared the responses below in light of the ongoing litigation
regarding the applicability of the Administrative Procedure Act (APA)
to certain Section 301 actions, which the United States disputes on
appeal. See In Re Section 301 Cases, No. 21-cv-00052-3JP, at *57, *71
(Ct. Int'l Trade Apr. 1, 2022); Brief of Defendants-Appellees at 47,
HMTX Indus., LLC et al. v. United States, No. 23-1891 [ECF No. 42]
(Fed. Cir. Dec. 21, 2023). In preparing the responses below, USTR does
not concede the applicability of the APA to Section 301 actions, nor
should USTR's responses in this notice be relied upon as evidence of
agency practice for purposes of the APA.
Service Fee on Maritime Transport Operators
The U.S. Trade Representative proposed a service fee on Chinese
maritime transport operators at a flat rate of up to $1,000,000 per
entrance of any vessel of that operator to a U.S. port, or at a rate of
up $1,000 per net ton of the vessel's capacity per entrance of any
vessel of that operator to a U.S. port.
USTR received several comments in response to the proposals. Many
of the comments agreed with the U.S. Trade Representative's
determination that some form of responsive action was required in light
of measures taken by China to dominate the maritime, shipbuilding and
logistics sector. The comments generally urged revisions to the
proposed fee schedule in order to lessen disproportionate economic
impact, and also urged delays in the imposition of fees. For example,
several comments noted that the proposed fee schedule (particularly as
it relates to the amount of the fee, a flat-rate versus tonnage fee,
and a fee assessed per rotation or string of U.S. port calls), would
disproportionately impact certain U.S. commodity exports, especially
those using bulk carriers for international transport, short-sea
shipping routes, and imports to certain U.S. territories. These
comments asserted that any fee assessed per single port of call would
disproportionately impact smaller ports, and thus negatively impact
local maritime jobs, as vessel operators may seek to mitigate fee
impact by visiting fewer ports or visiting only major U.S. ports. Some
comments sought clarity on how a ``Chinese operator'' and ``Chinese-
built vessel'' would be defined for purposes of the final action.
USTR also received a number of comments asserting that the proposed
fee would exert more leverage on China, and thus be more effective at
obtaining the elimination of China's practices, if fees were directed
at vessel owners, rather than operators. These comments assessed that
vessel operators would be more likely to pass along any fee to
importers and that, as result, a fee directed at operators would likely
be ineffective in changing operator behavior in procuring Chinese
vessels for international transport.
Considering the public comments, the U.S. Trade Representative has
made certain adjustments to the proposed fee on maritime transport to
include any vessel operated by Chinese crew, or any vessel owned by an
entity of China, as set forth in Annex I. In response to public
comments regarding the amount of the fee, the U.S. Trade Representative
has determined to assess the fee on a net tonnage basis, with the
initial fee set at $0 for the first 180 days from the date of
determination (that is, until October 14, 2025). This fee will then
increase to a rate of $50 per NT and will increase on an annual basis
for three years. In consideration of potential impacts to small ports
if a fee were to be assessed at each port of call, the U.S. Trade
Representative has determined to assess the fee upon entry at the first
U.S. port or place from a foreign destination per rotation or string of
U.S. port calls. The fee will be assessed at the first U.S. port within
the customs territory of the United States. The U.S. Trade
Representative has determined that any such fee would be charged per
rotation or string of U.S. port calls, and no more than five times a
year on an individual vessel.
In response to comments regarding the effectiveness of a fee on
Chinese operators, the U.S. Trade Representative has determined to
assess the fee on any Chinese vessel operator and on any
[[Page 17118]]
vessel owned by a Chinese entity. Imposing a fee on a vessel owner may
more directly influence purchasing decisions and exact more financial
pressure on Chinese shipbuilders, thus providing an even more
significant source of leverage to encourage China to eliminate the
investigated practices. The U.S. Trade Representative has also
determined to implement the initial proposal to assess a fee on a
Chinese operator to further disincentivize use of Chinese shipping
services.
Service Fee on Maritime Transport Operators With Fleets Comprised of
Chinese-Built Vessels
The U.S. Trade Representative proposed a flat fee of up to
$1,500,000 per vessel entry of a Chinese-built vessel to a U.S. port.
The U.S. Trade Representative also proposed escalating fees per vessel
entry to a U.S. port based on the percentage of Chinese-built vessels
in the operator's fleet. The U.S. Trade Representative also proposed a
flat fee of up to $1,000,000 per vessel entry to a U.S. port when an
operator's fleet is comprised of 25 percent or more Chinese-built
vessels.
In response to the proposals, several comments expressed concerns
that the proposed fees would result in higher prices and shortages for
American importers and consumers. Comments also expressed concerns that
the proposals would cause U.S. exports, particularly bulk cargo
exports, to be more expensive. Some commenters stated that the proposed
fees and attendant increased costs of imports and exports would put
them out of business. Commenters argue that the fees should be aimed at
Chinese state-owned operators, rather than non-Chinese operators. Some
comments noted the lack of capacity of U.S. shipbuilders and questioned
whether the proposed fees would do anything to address the cost
advantage enjoyed by Chinese shipbuilders. Comments also claimed that
the proposed fees would likely result in fewer port calls at smaller
ports, leading to a loss of jobs and exports at these smaller ports.
A few comments agreed with the proposals, noting that the proposed
fees would address trade imbalances, enhance national security, support
investment in the American maritime industrial base, and promote higher
environmental and labor standards. One commenter suggested that the
proposed fees be captured in a U.S. shipbuilding and mariner
compensation trust fund to be expended each year for reviving the U.S.
merchant marine. Some comments suggested that care should be taken so
as to not allow for circumvention of the proposed fees by transshipment
of cargo through Canada or Mexico. If the proposed fees were to be
imposed, some commenters requested a phased-in approach, a per tonnage
or per container fee that is capped, a per-voyage rather than per-entry
fee, and that fees only apply to future-built vessels and not existing
vessels. Some comments requested an exemption for vessels carrying U.S.
agriculture, coal, or other commodity exports; others requested an
exemption for ``short sea,'' Great Lakes, or Caribbean shipping; one
commenter requested an exemption for Hong Kong-registered vessels and
operators. Some comments suggested alternatives to a fee-based system,
such as tax credits for ordering U.S.-built ships or other investments
in the U.S. shipbuilding industry.
Considering the public comments and the advice of the Section 301
Committee, the U.S. Trade Representative has determined not to impose
any fee based on fleet composition at this time. The U.S. Trade
Representative has determined instead to impose a fee on maritime
transport using any Chinese-built vessels. This fee is applied on a
non-discriminatory basis. This fee will be assessed on a per tonnage or
per container fee basis, whichever fee is higher.
In response to comments regarding a phase-in or transition period,
the fee on Chinese-built vessels will be set at $0 for the first 180
days from the date of determination (that is, until October 14, 2025),
to be increased on an annual basis according to the schedule and
provisions set forth in Annex II. In response to comments regarding the
potential for disproportionate economic impact on certain U.S.
interests or industries, the following vessels as set forth in Annex II
will not be subject to the scope of the fee: (1) U.S. vessels enrolled
in certain U.S. Maritime Administration programs; (2) vessels arriving
empty or in ballast; (3) smaller vessels; (4) vessels engaged in short
sea shipping; (5) U.S.-owned companies' vessels; and (6) specialized
export vessels. In making this determination, the U.S. Trade
Representative balanced the need to impose a service fee to
disincentivize the use and purchase of Chinese-built ships, as a
counter to China's dominance, with concerns raised in the comments
regarding the effect that such a fee would have on shipping costs and
the U.S. economy.
The U.S. Trade Representative did not determine to limit the scope
of the fees to exclude vessels based on an export commodity basis, in
light of the fee in Annex II is not applicable to vessels below certain
size thresholds, vessels arriving empty or in ballast, and short sea
shipping. In order to incentivize domestic production, which may help
create leverage for the elimination of the investigated acts, policies,
and practices or otherwise to mitigate the burden or restriction, the
U.S. Trade Representative has determined that, upon order and until
delivery of a U.S.-built vessel of equal or greater capacity, the fee
may be eligible for suspension on an equivalent size Chinese-built
vessel, for a period not to exceed three years. See also discussion of
comments on service fee remission below.
Service Fee on Maritime Transport Operators With Prospective Orders for
Chinese Vessels
The U.S. Trade Representative proposed an additional fee on vessel
operators based on the percentage of vessels ordered from Chinese
shipyards, either escalating based on percentage of vessel orders in or
expected to be delivered by Chinese shipyards over the next 24 months,
or a flat fee on vessel operators with 25 percent or more vessels
ordered by that operator, or expected to be delivered to that operator,
are ordered or expected to be delivered by Chinese shipyards over the
next 24 months.
Some commenters expressed support for this proposal. Other
commenters made recommendations, including phase-in periods,
grandfathering of previously ordered ships, reduced fees or imposition
of fees per Twenty-Foot Equivalent Units (TEU) or cargo value, and
allowing waivers, among others.
A number of commenters expressed concerns about the potential
impact on shipping to and from the United States due to insufficient
domestic alternatives, including increases in shipping costs for
exporters (including farmers and coal companies) and consumers, as well
as concerns about port diversion or consolidation. Alternatives
suggested by commenters included sliding scale fees, incentives,
credits, grants, or regulatory reform to encourage U.S. shipbuilding
investment, taxes on Chinese-flagged ships to be added to a commercial
shipbuilding revitalization fund, and a fee on inbound containers.
Considering the public comments and the advice of the Section 301
Committee, the U.S. Trade Representative has determined not to impose a
fee based on prospective orders of Chinese vessels at this time. The
U.S. Trade Representative currently considers that the initial fees
being implemented in this Notice, along with the proposed tariff
actions, may provide sufficient leverage to encourage China to
[[Page 17119]]
eliminate its acts, polices, and practices, or otherwise mitigate the
burden or restriction from China's market dominance.
Service Fee Remission for Maritime Transport via U.S.-Built Vessels
To promote the acquisition and use of U.S.-built ships by
operators, the U.S. Trade Representative proposed a service fee
remission in the form of a refund on the additional fees charged to an
operator providing international maritime transport services in an
amount up to $1,000,000, per entry into a U.S. port of a U.S.-built
vessel.
A large number of comments, both supporting and opposing the
proposed fee remission, highlighted the lack of capacity of U.S.
shipbuilders. Several comments opposing the proposal noted that it
would take years for operators to take advantage of the refund or that,
given the lack of capacity, the proposed remission would be unlikely to
provide much benefit. One comment noted that the proposal failed to
address underlying capacity constraints.
To address the lack of capacity of U.S. shipbuilders, comments
supporting the proposal provided suggestions to broaden the eligibility
of the proposed fee remission to more ships. These included allowing
fee remission to ships produced in third countries and to ships that
are made available to sealift command.
A number of comments provided alternatives to the proposed fee
remission. One comment suggested that a better approach might be to
phase in the assessed fees. A few comments suggested incentives for
U.S. ships in the form of grants and tax credits. Other suggested
alternatives included certain exemptions to the fees. Suggested
exemptions included industries that rely on international supply
chains, ships used for exports of agriculture products, and ships used
for regional shipping.
Considering the public comments and the advice of the Section 301
Committee, the U.S. Trade Representative has determined to adjust the
proposed service fee remission. The U.S. Trade Representative has
determined to allow for suspending the fee on an equivalent size
Chinese-built vessel, for a period not to exceed three years, upon
order and until delivery of a U.S.-built vessel of equal or greater
size within that time period. Additionally, as discussed above,
considering the comments regarding the proposed service fee remission,
the U.S. Trade Representative has determined to adjust the service fees
so that they are phased in over time.
To further promote the acquisition of U.S.-built ships, and address
capacity constraints, the U.S. Trade Representative has also determined
to phase in a service fee on vessel operators of foreign-built vehicle
carriers on a non-discriminatory basis. As outlined in Annex III, the
fee will be set at zero for the first 180 days, and will apply to
vessel operators of all vehicle carriers that are non-U.S. built
vessels. This fee may also be eligibility for remission for a
particular foreign-built vessel for a period not to exceed three years
if the vessel owner orders and takes delivery of a U.S.-built vessel of
equivalent or greater car-equivalent unit (CEU) capacity within that
time period.
Restrictions on Services To Promote the Transport of U.S. Goods on U.S.
Vessels
The U.S. Trade Representative proposed a restriction on maritime
services with escalating requirements over a seven-year period for U.S.
operators to increase the percentage of U.S. products on U.S.-flagged
ships and the percentage of U.S. products on U.S.-flagged, U.S.-built
vessels. The U.S. Trade Representative also proposed that U.S. goods
may be approved for export on a non-U.S.-built vessel, provided that 20
percent of what the operator transports by vessel is transported on
U.S.-flagged, U.S.-built ships.
In response, several comments expressed concern that the proposals
would only punish U.S. exporters. Some asserted that the proposals
would lead to a decrease in U.S. exports and would ultimately divert
ships from U.S. ports. Several comments noted that the timelines for
the proposals are too aggressive and not achievable. Most of these
comments noted that there is currently insufficient capacity of U.S.
ships and one comment noted a lack of U.S. mariners. A number of
comments asserted that, rather than provide an incentive for using more
U.S. ships, the proposals would lead to operators consolidating
shipments, visiting fewer and larger ports, and causing harm to smaller
ports. One comment noted that rather than provide an incentive for
using U.S. ships, the proposals would force companies to focus on
larger ports. Several comments asserted that the proposals would cause
particular harm to certain products, including agriculture products,
bulk products, and coal.
Some comments agreed with the proposals, noting that an escalating
percentage of U.S. products to be exported every year on U.S. flagged
ships would help curb the use of Chinese built ships, drive demand for
domestically produced ships, and provide benefits to upstream domestic
industries, including steel. A number of comments supported the
proposal, but expressed concern regarding the lack of capacity on U.S.
ships. One comment asserted that the U.S. would need at least 15 years
to build sufficient capacity.
With respect to LNG ships, one comment noted there are no U.S.-
built vessels and only one U.S.-flagged LNG vessel. To address the
capacity constraints, multiple comments provided suggestions for
mitigating the fee, including: a delay in implementation; exemptions
for specific products; exemptions for non-Chinese operators with
Chinese ships already on order; and an exemption for ships built by
U.S. allies. Several comments noted possible harm to regional trade and
requested that that the proposals be limited to trans-oceanic vessels.
Finally, some comments noted that they needed additional information
and clarification as to how the proposals would be implemented and
enforced.
Considering the public comments and the advice of the Section 301
Committee, the U.S. Trade Representative has determined to limit the
scope of the proposed restrictions to U.S. LNG exports, with
restrictions on maritime transport of LNG to begin on April 17, 2028,
and gradually increasing thereafter for a period in total of 22 years.
See Annex IV. The U.S. Trade Representative has further determined that
an operator or its non-compliant LNG vessel may be licensed to operate
for up to three years as if the requirement is met, if that operator
orders and takes delivery of a U.S.-built LNG vessel of equivalent or
greater capacity within that time period.
Other Actions: Actions To Reduce Exposure to and Risks From LOGINK or
Similar Platforms
The U.S. Trade Representative requested comments on other actions
to reduce exposure to and risks from China's promotion of the National
Transportation and Logistics Public Information Platform (LOGINK) or
other similar platforms. In response, some commenters expressed support
for U.S. efforts to restrict LOGINK and its access to shipping data or
to ban U.S. ports from using LOGINK.
Considering the public comments and the advice of the Section 301
Committee, the U.S. Trade Representative intends to continue to explore
responsive actions as to Chinese digital logistics platforms (e.g.,
LOGINK).
[[Page 17120]]
A number of commenters addressed additional issues in response to
USTR's narrowly scoped request for comments on ``other actions'' with
respect to LOGINK. USTR took note of these comments, including
suggestions that the United States reinvest in or incentivize U.S.
shipbuilding and commercial fleets, including through fees being
directed to a trust fund to support domestic shipyards, skilled
workforce training, technology development, the addition of a land
border fee and fee on Chinese-built offshore vessels, and expanding
access to U.S. cabotage trade for U.S. stakeholders and European
tonnage and shipbrokers.
Response to Legal Arguments Raised in the Comments
Section 301(b) of the Trade Act gives broad authority to the U.S.
Trade Representative to take action to obtain the elimination of an
unreasonable acts, policies, and practices of foreign country that
burden or restrict U.S. commerce. Section 301(b) further provides that
actions may be taken that are within the power of the President with
respect to trade in any goods or services, or with respect to any other
areas of pertinent relations with the foreign country. Section 301(c)
further describes specific action the U.S. Trade Representative is
authorized to take.
Despite the broad grant of authority in the 301 statute, some
comments assert that the proposed actions are ultra vires, otherwise
illegal, or unconstitutional. USTR responds to these comments below.
A few comments assert that the proposed actions are inconsistent
with World Trade Organization (WTO) rules, and the U.S.-China Agreement
on Maritime Transport. With respect to WTO rules, some comments argue
that the service fees on Chinese operators and owners and operators of
Chinese-built ships are a discriminatory importation charge that is
inconsistent with the WTO's multilateral dispute resolution mechanism.
USTR notes that Section 301(b) of the Trade Act authorizes the actions
proposed in the investigation, which are in response to numerous
findings of unreasonable acts, policies, and practices of China that
burden or restrict U.S. commerce. Moreover, as detailed in USTR's
Report, the myriad of acts, policies and practices deployed by China in
pursuit of its goals for global dominance of the maritime and logistics
sectors cannot be appropriately addressed through recourse to WTO
dispute settlement proceedings.
In response to comments that the proposed actions violate the U.S.-
China Agreement on Maritime Transport,\6\ USTR notes that the agreement
does not contain any provision which would prohibit the U.S. Trade
Representative from taking the proposed actions, especially in light of
acts, policies, and practices by China which are inconsistent with
China's commitment to market principles in shipping and intermodal
services.
---------------------------------------------------------------------------
\6\ Agreement on Maritime Transport between the Government of
the United States of America and the Government of the People's
Republic of China, Signed at Washington on 8 December 2003.
---------------------------------------------------------------------------
In response to comments that USTR's proposed service fees imposed
on non-Chinese operators are ultra vires, USTR notes that the plain
language of section 301(c) of the Trade Act. Section 301(c)(1)(B)
authorizes the U.S. Trade Representative to impose restrictions on
services of the investigated foreign country, notwithstanding any other
provision of law. Section 301(c)(3)(A)-(B) provides additional
authority for the U.S. Trade Representative to take action authorized
by Section 301(b) against any goods or economic sector, on a
nondiscriminatory basis or solely against the foreign country under
investigation, and without regard to whether or not such goods or
economic sector were involved in the acts, policies or practices that
are the subject of the investigation. Together, these provisions
authorize services fees to be applied against China as well as on a
nondiscriminatory basis.
In response to comments that USTR's proposed restriction to promote
the transport of U.S. goods on U.S. ships does not constitute a fee or
a duty or a restriction on a service, USTR notes that the proposal to
restrict the international maritime transport of certain U.S. goods is,
by its very terms, a restriction of a service. USTR does not consider
the restriction on services in Annex IV to be taken with respect to any
prior service sector authorization because this action creates a new
restriction on the provision of maritime transport services.
USTR does not consider that the proposed fees contravene the Export
Clause of the U.S. Constitution, nor does USTR consider the fees to be
sufficiently closely related to the export process. The proposed fees
are fees on maritime transport services payable upon entrance of a
covered vessel at arrival at a port in the customs territory of the
United States from a foreign destination, rather than on export from a
state of the United States.
USTR disagrees with novel arguments that the proposed actions may
amount to a regulatory taking without just compensation or that the
proposed actions are unconstitutional under the Excessive Fines Clause
of the Eighth Amendment. Assuming for the sake of response that a
service fee could provide a basis for a constitutional takings claim,
the fee structure in the final actions has been recalibrated in
response to public comments in order to diminish severe adverse
economic impacts on U.S. industries. The fees also reflect an amount
that would be sufficiently meaningful to change commercial behavior and
potential market responses. Coupled with the limited scope of the fees
and extended lead times, USTR finds no basis for an assertion of an
unconstitutional takings claim. USTR considers that the Excessive Fines
Clause of the Eighth Amendment would be inapplicable to USTR's proposed
actions as service fees or restrictions are not themselves fines or
penalties.
D. Proposed Action
In accordance with the President's direction, the U.S. Trade
Representative has considered whether to propose additional duties on
certain ship-to-shore cranes and other cargo handling equipment. The
U.S. Trade Representative has determined that it is appropriate to do
so considering, as discussed in USTR's Report, China's overwhelming
production share of ship-to-shore cranes, intermodal chassis, and
shipping containers, and China's increasing shares of other components
and products.
Specifically, the Report issued by USTR in this investigation
highlights the vulnerabilities arising from over-reliance on Chinese
production of ship-to-shore cranes and other maritime components and
equipment, noting that such over-reliance may create opportunities for
China to manipulate the supply of critical components or materials
essential to U.S. maritime infrastructure. USTR's report highlights
that China's targeting of the maritime sectors for dominance has
severely undercut competition, leading to China overwhelming
controlling global production of STS cranes, intermodal chassis, and
shipping containers, among others. Consistent with the President's
direction in Executive Order 14269, the U.S. Trade Representative finds
that proposing 301 duties on these products is an additional and
appropriate source of leverage to encourage China to eliminate the
investigated acts policies and practices.
The U.S. Trade Representative has determined to propose the
following:
[[Page 17121]]
Additional duties of up to 100 percent on STS cranes
manufactured, assembled, or made using components of Chinese origin, or
manufactured anywhere in the world by a company owned, controlled, or
substantially influenced by a Chinese national, as described in Annex
V, and
Additional duties of up to 100 percent on certain cargo
handling equipment of China, as specified in Annex V to this notice.
In order to give effect to the President's direction, the U.S.
Trade Representative proposes that action with the respect to STS
cranes be taken on a non-discriminatory basis. For informational
purposes, Annex V contains a list of the tariff subheadings and product
descriptions covered by the tariff action.
E. Request for Public Comments
In accordance with Section 307(a)(2)(b) of the Trade Act (19 U.S.C.
2414(b)), and consistent with specific direction of the President, USTR
invites comments from interested persons with respect to the proposed
tariff actions as provided in Annex V to this notice.
USTR requests comments with respect to the following considerations
in relation to proposed tariff actions:
The specific products to be subject to increased duties,
including whether the tariff subheadings and product descriptions
listed in the Annex V should be retained or removed, or whether tariff
subheadings not currently on the list should be added.
The level of the increase, if any, in the rate of duty.
Whether the increased duties should take effect in 180
days, or over a phase-in period of 6 to 24 months.
In commenting on the proposed tariff actions, USTR requests that
commenters specifically address whether the action would be practicable
or effective to obtain the elimination of China's acts, policies, and
practices.
To be assured of consideration, you must submit written comments on
the proposed action by May 19, 2025, and post-hearing rebuttal comments
seven calendar days after the last day of the public hearing.
F. Hearing Participation
The Section 301 Committee will convene a public hearing in the main
hearing room of the U.S. International Trade Commission, 500 E Street
SW, Washington, DC 20436, beginning at 10 a.m. on May 19, 2025
regarding the proposed tariff action. To be assured of consideration,
you must submit requests to appear at the hearing by May 8, 2025. The
request to appear should include a summary of the testimony, and may be
accompanied by a pre-hearing submission.
To participate in the hearing, you must submit a request to appear
at the hearing using the appropriate docket on the electronic portal at
https://comments.ustr.gov/s/. You will be able to view docket number
USTR-2025-0009 entitled `Request to Appear at the Hearing on Proposed
Action in the Section 301 Investigation of China's Targeting of the
Maritime, Logistics, and Shipbuilding Sectors for Dominance'. Requests
to appear must include a summary of testimony, and may be accompanied
by a pre-hearing submission. Remarks at the hearing are limited to five
minutes to allow for possible questions from the Section 301 Committee.
All submissions must be in English.
VII. Procedure for Written Submissions
You must submit written comments and rebuttal comments using docket
number USTR-2025-0008 on the electronic portal at https://comments.ustr.gov/s/. To submit written comments, use the docket on the
portal entitled `Request for Comments on Proposed Action in the Section
301 Investigation of China's Targeting of the Maritime, Logistics, and
Shipbuilding Sectors for Dominance.'
You do not need to establish an account to submit comments. The
first screen of each docket allows you to enter identification and
contact information. Third party organizations such as law firms, trade
associations, or customs brokers, should identify the full legal name
of the organization they represent, and identify the primary point of
contact for the submission. Information fields are optional; however,
your comment or request may not be considered if insufficient
information is provided.
Fields with a gray Business Confidential Information (BCI) notation
are for BCI information which will not be made publicly available.
Fields with a green (Public) notation will be viewable by the public.
After entering the identification and contact information, you can
complete the remainder of the comment, or any portion of it by clicking
``Next.'' You may upload documents at the end of the form and indicate
whether USTR should treat the documents as business confidential or
public information.
Any page containing BCI must be clearly marked `BUSINESS
CONFIDENTIAL' on the top of that page and the submission should clearly
indicate, via brackets, highlighting, or other means, the specific
information that is BCI. If you request business confidential
treatment, you must certify in writing that disclosure of the
information would endanger trade secrets or profitability, and that the
information would not customarily be released to the public.
Parties uploading attachments containing BCI also must submit a
public version of their comments. If these procedures are not
sufficient to protect BCI or otherwise protect business interests,
please contact the USTR Section 301 support line at (202) 395-5725 to
discuss whether alternative arrangements are possible.
USTR will post attachments uploaded to the docket for public
inspection, except for properly designated BCI. You can view
submissions on USTR's electronic portal at https://comments.ustr.gov/s/
by entering docket numbers USTR-2025-0008 and USTR-2025-0009 in the
search field on the home page.
The U.S. Trade representative will continue to monitor the effects
of the trade action and the progress made toward resolution of this
matter. Additionally, the U.S. Trade Representative will continue to
consider the proposed actions and possible actions, including actions
to address LOGINK and fees on Chinese-built off-shore vessels. In
considering possible modifications, the U.S. Trade Representative will
also consider the progress of policies under Executive Order 14269
(Restoring America's Maritime Dominance), including coordination with
allies and partners regarding the actions taken in this investigation
and efforts to reduce dependencies on adversaries through capital
investments in U.S. shipbuilding and the establishment of a reliable
funding source for programs under the Maritime Action Plan. If
modification to the action may be appropriate, the U.S. Trade
Representative will consider the comments received in response to the
February 27 notice.
Jennifer Thornton,
General Counsel, Office of the United States Trade Representative.
In all cases the formal language in Annexes I, II, III, and IV
govern the terms of the respective actions. The fees and requirements
of the following Annexes are not cumulative. A vessel, as defined in 19
CFR 4.0(a), will be subject to either: (a) one of the three fees
directed under Annex I, II, or III; or (b) a requirement under Annex
IV.
The fees and requirements are assessed in the following order:
(1) A vessel that is specially designed for the international
maritime transport
[[Page 17122]]
of liquified natural gas (LNG), is subject to Annex IV. A vessel
subject to Annex IV is not subject to the fees in Annexes I, II, or
III.
(2) A vessel properly identified as a ``Vehicle Carrier'' on U.S.
Customs and Border Protection Form 1300, or its electronic equivalent,
will be subject to Annex III.
(3) A vessel that meets the conditions of Annex I, e.g., a vessel
operated by a Chinese entity or owned by a Chinese entity, will be
subject to the fee imposed under Annex I.
(4) A vessel may be subject to Annex II when Annex I and Annex III
do not apply.
Annex I: Service Fee on Chinese Vessel Operators and Vessel Owners of
China
For the purposes of this Annex:
(a) Vessel. The term ``vessel'' has the meaning defined in 19
CFR 4.0(a).
(b) U.S. port. The term ``U.S. port'' has the meaning defined in
19 CFR 101.3(b)(1).
(c) Vessel operator. The term ``vessel operator'' means the
entity which is identified as the operator of the vessel and whose
name would appear on the Vessel Entrance or Clearance Statement
(U.S. Customs and Border Protection (CBP) Form 1300) or its
electronic equivalent.
(d) Vessel owner. The term ``vessel owner'' means the entity
which is identified as the owner of the vessel and whose name would
appear on the Vessel Entrance or Clearance Statement (CBP Form 1300)
or its electronic equivalent.
(e) Vessel owner of China. A vessel owner of China means any
entity:
(1) whose country of citizenship is identified as the People's
Republic of China (PRC), Hong Kong, or Macau on the Vessel Entrance
or Clearance Statement or its electronic equivalent;
(2) whose headquarters, parent entity's headquarters, or parent
entity's principal place of business is the PRC, Hong Kong, or
Macau;
(3) is owned by, or controlled by, a citizen or citizens of the
PRC, Hong Kong, or Macau;
(4) is owned by, controlled by, or subject to the jurisdiction
or direction of the PRC, Hong Kong, or Macau. An entity is owned by,
controlled by, or subject to the jurisdiction or direction of the
PRC, Hong Kong, or Macau where:
(A) the entity is a national or resident of the PRC, Hong Kong,
or Macau;
(B) the entity is organized under the laws of or has its
principal place of business in the PRC, Hong Kong, or Macau;
(C) 25 percent or more of the entity's outstanding voting
interest, board seats, or equity interest is held directly or
indirectly by any combination of the governments of the PRC, Hong
Kong, or Macau;
(D) 25 percent or more of the entity's outstanding voting
interest, board seats, or equity interest is held directly or
indirectly by any combination of the persons who fall within
subparagraph (e)(4)(A)-(C) of this Annex;
(5) is owned by, or controlled by, an entity listed as a Chinese
Military Company pursuant to Section 1260H of the William M.
(``Mac'') Thornberry National Defense Authorization Act for Fiscal
Year 2021 (Pub. L. 116-283); or
(6) is an ocean common carrier, as defined in 46 U.S.C.
40102(7), that is, or whose operating assets are, directly or
indirectly, owned or controlled by the government of the PRC or any
of its political subdivisions, with ownership or control by a
government being deemed to exist for a carrier if:
(A) a majority of the interest in the carrier is owned or
controlled in any manner by the government of the PRC, an agency of
the government of the PRC, or a public or private person controlled
by the government of the PRC; or
(B) the government of the PRC or any of its political
subdivisions has the right to appoint or disapprove the appointment
of a majority of the directors, the chief operating officer, or the
chief executive officer of the carrier.
(f) Vessel operator of China. A vessel operator of China means
any entity that is a vessel operator that meets one or more of the
conditions of subparagraphs (e)(1)-(6) of this Annex.
Collections, supplemental payments, and refunds--
(g) Time and place of liability. Subject to the exemptions and
special rules of this Annex, on or before the entry of a vessel at
the first U.S. port or place from outside the Customs territory on a
particular string, the vessel operator must pay:
Effective as of April 17, 2025, a fee in the amount of $0 per
net ton for the arriving vessel.
Effective as of October 14, 2025, a fee in the amount of $50 per
net ton for the arriving vessel.
Effective as of April 17, 2026, a fee in the amount of $80 per
net ton for the arriving vessel.
Effective as of April 17, 2027, a fee in the amount of $110 per
net ton for the arriving vessel.
Effective as of April 17, 2028, a fee in the amount of $140 per
net ton for the arriving vessel.
The fee will be charged up to five times per year, per vessel.
(h) Reporting. The vessel operator is responsible for
calculating this fee and providing supporting documentation, upon
request.
(i) Fee payment. The vessel operator must pay all accumulated
fees for which that entity is liable as determined by CBP. Payment
may be made using existing government methods to the extent
possible, as determined by CBP.
Annex II: Service Fee on Vessel Operators of Chinese-Built Vessels
For the purposes of this Annex:
(a) Vessel. The term ``vessel'' has the meaning defined in 19
CFR 4.0(a).
(b) Entry of a vessel. The phrase ``entry of a vessel'' has the
meaning provided in 19 CFR 4.3.
(c) U.S. port. The term ``U.S. port'' has the meaning defined in
19 CFR 101.3(b)(1).
(d) Vessel operator. The term ``vessel operator'' means the
entity which is identified as the operator of the vessel and whose
name would appear on the Vessel Entrance or Clearance Statement
(U.S. Customs and Border Protection (CBP) Form 1300) or its
electronic equivalent.
(e) Chinese-built vessel. A Chinese-built vessel is a vessel
that was built in the People's Republic of China, consistent with
the definition of place of build in CBP and U.S. Coast Guard (USCG)
regulations and would be so identified on the Vessel Entrance or
Clearance Statement (CBP Form 1300) or its electronic equivalent.
(f) Container. The term ``container'' means a container as
defined in 19 CFR 10.41a, which references the definitions used in
the Customs Convention on Containers.
Collections, supplemental payments, and refunds--
(a) Time and place of liability. Subject to the coverage and
special rules of this Annex, upon the arrival of a Chinese-built
vessel to a U.S. port or point from outside the Customs territory on
a particular string, a vessel operator that is not a vessel operator
of China (as defined in Annex I, paragraph (f)) must pay the higher
of these two fee calculation methods:
(1) Effective as of April 17, 2025, a fee in the amount of $0
per net ton for the arriving vessel.
Effective as of October 14, 2025, a fee in the amount of $18 per
net ton for the arriving vessel.
Effective as of April 17, 2026, a fee in the amount of $23 per
net ton for the arriving vessel.
Effective as of April 17, 2027, a fee in the amount of $28 per
net ton for the arriving vessel.
Effective as of April 17, 2028, a fee in the amount of $33 per
net ton for the arriving vessel.[FEDREG][VOL]*[/VOL][NO]*[/
NO][DATE]*[/DATE][NOTICES][NOTICE][PREAMB][AGENCY]*[/
AGENCY][SUBJECT]*[/SUBJECT][/PREAMB][SUPLINF][HED]*[/
HED][EXTRACT][P]*[/P]
or:
(2) Effective as of: April 17, 2025, a fee in the amount of $0
for each container discharged.
Effective as of: October 14, 2025, a fee in the amount of $120
for each container discharged.
Effective as of: April 17, 2026, a fee in the amount of $153 for
each container discharged.
Effective as of: April 17, 2027, a fee in the amount of $195 for
each container discharged.
Effective as of: April 17, 2028, a fee in the amount of $250 for
each container discharged.
The fee will be charged up to five times per year, per vessel.
(b) Reporting. If the per container fee is assessed, the vessel
operator must report to CBP the total number of containers
discharged at a U.S. port, or discharged with an ultimate
destination in the Customs territory of the United States.
(c) Fee payment. The vessel owner must pay all accumulated fees
for which that entity is liable as determined by CBP. Payment may be
made using existing U.S. government methods to the extent possible
as determined by CBP.
(d) Suspension of Fee. CBP will suspend this applicable fee on a
particular vessel for a period not to exceed three years if the
vessel owner orders and takes delivery of a
[[Page 17123]]
U.S.-built vessel of equivalent or greater net tonnage. Owners will
be eligible for the remission upon order of, and until delivery of,
a U.S.-built vessel, as defined under paragraph (e) of this section.
An equivalent non-U.S. built vessel means a vessel with a net
tonnage capacity of equal to or less than the U.S.-built vessel
ordered in this paragraph. If a prospective vessel owner does not
take delivery of the U.S.-built vessel ordered within three years,
the fees will become due immediately. Proof of the order must be
provided on demand, and may include information such as order and
contract information related to the order.
(e) Requirements for U.S.-Built Vessels. A U.S.-built vessel
meets the requirements described in this Annex if:
(1) the vessel is built in the United States;
(2) the vessel is documented under the laws of the United
States;
(3) all major components of the hull or superstructure of the
vessel are manufactured (including all manufacturing processes from
the initial melting stage through the application of coatings for
iron or steel products) in the United States; and
(4) the components of the vessel listed in paragraph (f) of this
section are manufactured in the United States.
(f) Components. The components of a U.S.-built vessel for
purposes of subparagraph (e)(4) of this section are the following:
(1) Air circuit breakers.
(2) Welded shipboard anchor and mooring chain.
(3) Powered and non-powered valves in Federal Supply Classes
4810 and 4820 used in piping.
(4) Machine tools in the Federal Supply Classes for metal-
working machinery numbered 3405, 3408, 3410 through 3419, 3426,
3433, 3438, 3441 through 3443, 3445, 3446, 3448, 3449, 3460, and
3461.
(5) Auxiliary equipment for shipboard services, including pumps.
(6) Propulsion equipment, including engines, propulsion motors,
reduction gears, and propellers.
(7) Shipboard cranes.
(8) Spreaders for shipboard cranes.
(9) Rotating electrical equipment, including electrical
alternators and motors.
(10) Compressors, pumps, and heat exchangers used in managing
and re-liquefying boil-off gas from liquefied natural gas.
Targeted Coverage
The fees imposed in this Annex do not apply to U.S. government
cargo.
The fees imposed in this Annex do not apply to the following
Chinese-built vessels:
(i) U.S.-owned or U.S.-flagged vessels enrolled in the Voluntary
Intermodal Sealift Agreement, the Maritime Security Program, the
Tanker Security Program, or the Cable Security Program;
(ii) vessels arriving empty or in ballast;
(iii) vessels with a capacity of equal to or less than: 4,000
Twenty-Foot Equivalent Units, 55,000 deadweight tons, or an
individual bulk capacity of 80,000 deadweight tons;
(iv) vessels entering a U.S. port in the continental United
States from a voyage of less than 2,000 nautical miles from a
foreign port or point;
(v) U.S.-owned vessels, where the U.S. entity owning the vessel
is controlled by U.S. persons and is at least 75 percent
beneficially owned by U.S. persons;
(vi) specialized or special purpose-built vessels for the
transport of chemical substances in bulk liquid forms; and
(vii) vessels principally identified as ``Lakers Vessels'' on
CBP Form 1300, or its electronic equivalent.
Annex III: Service Fee on Vessel Operators of Foreign-Built Vehicle
Carriers
For the purposes of this Annex:
(a) Vessel. The term ``vessel'' has the meaning defined in 19
CFR 4.0(a).
(b) U.S. port. The term ``U.S. port'' has the meaning defined in
19 CFR 101.3(b)(1).
(c) Vessel operator. The term ``vessel operator'' means the
entity which is identified as the operator of the vessel and whose
name would appear on the Vessel Entrance or Clearance Statement
(U.S. Customs and Border Protection (CBP) Form 1300) or its
electronic equivalent.
(d) Vehicle carrier. A vessel principally identified as a
``Vehicle Carrier'' on CBP Form 1300, or its electronic equivalent.
For information only, a vessel is normally principally identified as
a vehicle carrier when the vessel is designed for wheeled or tracked
cargo that can load itself on-board. Cargo generally drives onto the
vessel through decks via ramps, rather than being lifted through
hatches.
(e) Non-U.S. built vessel. The term ``non-U.S. built vessel''
means any vessel that does not meet the requirements of paragraph
(f) of this section.
(f) Requirements for U.S.-Built Vessels. A U.S.-built vessel
meets the requirements described in this Annex if:
(1) the vessel is built in the United States;
(2) the vessel is documented under the laws of the United
States;
(3) all major components of the hull or superstructure of the
vessel are manufactured (including all manufacturing processes from
the initial melting stage through the application of coatings for
iron or steel products) in the United States; and
(4) the components of the vessel listed in paragraph (g) of this
section are manufactured in the United States.
(g) Components. The components of a U.S.-built vessel for
purposes of subparagraph (e)(4) of this section are the following:
(1) Air circuit breakers.
(2) Welded shipboard anchor and mooring chain.
(3) Powered and non-powered valves in Federal Supply Classes
4810 and 4820 used in piping.
(4) Machine tools in the Federal Supply Classes for metal-
working machinery numbered 3405, 3408, 3410 through 3419, 3426,
3433, 3438, 3441 through 3443, 3445, 3446, 3448, 3449, 3460, and
3461.
(5) Auxiliary equipment for shipboard services, including pumps.
(6) Propulsion equipment, including engines, propulsion motors,
reduction gears, and propellers.
(7) Shipboard cranes.
(8) Spreaders for shipboard cranes.
(9) Rotating electrical equipment, including electrical
alternators and motors.
(10) Compressors, pumps, and heat exchangers used in managing
and re-liquefying boil-off gas from liquefied natural gas.
Collections, supplemental payments, and refunds--
(h) Time and place of liability. Subject to the coverage and
special rules of this Annex, on or before the entry of a non-U.S.
built vessel at the first U.S. port or place from outside the
Customs territory, the vessel operator must pay:
Effective as of April 17, 2025, a fee of $0 on the entering non-
U.S. built vessel.
Effective as of October 14, 2025, a fee in the amount of $150
per Car Equivalent Unit (CEU) capacity of the entering non-U.S.
built vessel.
(i) Reporting. The vessel operator is responsible for
calculating this fee and providing supporting documentation, upon
request.
(j) Fee payment. The vessel operator must pay all accumulated
fees for which that entity is liable as determined by CBP. Payment
may be made using existing government methods to the extent possible
as determined by CBP.
(k) Suspension of Fee. CBP will suspend this applicable fee on a
particular vessel for a period not to exceed three years if the
vessel owner orders and takes delivery of a U.S.-built vessel of
equivalent or greater CEU. Owners will be eligible for the remission
upon order of, and until delivery of, a U.S.-built vessel, as
defined under paragraph (f) of this section. An equivalent non-U.S.
built vessel means a vessel with a CEU capacity of equal to or less
than the U.S.-built vessel ordered in this paragraph. If a
prospective vessel owner does not take delivery of the U.S.-built
vessel ordered within three years, the fees will become due
immediately. Proof of the order must be provided on demand, and may
include information such as order and contract information related
to the order.
Annex IV: Restriction on Certain Maritime Transport Services
For the purposes of this Annex:
(a) Vessel. The term ``vessel'' has the meaning defined in 19
CFR 4.0(a).
(b) Exportation. The term ``exportation'' has the meaning
defined in 19 CFR 101.1.
(c) U.S. port. The term ``U.S. port'' has the meaning defined in
19 CFR 101.3(b)(1).
(d) Vessel operator. The term ``vessel operator'' means the
entity which is identified as the operator of the vessel and whose
name appears on the Vessel Entrance or Clearance Statement (U.S.
Customs and Border Protection (CBP) Form 1300).
(e) Vessel owner. The term ``vessel owner'' means the entity
which is identified as the owner of the vessel and whose name
appears on the Vessel Entrance or Clearance Statement (CBP Form
1300).[FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][NOTICES][NOTICE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/
SUBJECT][/PREAMB][SUPLINF][HED]*[/HED][EXTRACT][P]*[/P]
* * * * *
Notwithstanding any other provision of law, exports of liquified
natural gas (LNG) shall be transported on vessels that receive a
license consistent with this Annex and meet
[[Page 17124]]
the requirements as described below on an annual basis.
(f) Schedule of Restrictions. For all LNG intended for
exportation by vessel in a calendar year, the following percentage
must be exported by a U.S.-built vessel that meets the requirements
described as follows:
(1) From April 17, 2025, to April 16, 2026: no restrictions.
(2) From April 17, 2026, to April 16, 2027: no restrictions.
(3) From April 17, 2027, to April 16, 2028: no restrictions.
(4) From April 17, 2028, to April 16, 2029: one percent on U.S.-
flagged and U.S.-operated vessels.
For every subsequent year, the following percentages are
exported by U.S.-built, U.S.-flagged, and U.S.-operated vessels:
(5) From April 17, 2029, to April 16, 2030: one percent.
(6) From April 17, 2030, to April 16, 2031: one percent.
(7) From April 17, 2031, to April 16, 2032: two percent.
(8) From April 17, 2032, to April 16, 2033: three percent.
(9) From April 17, 2033, to April 16, 2034: three percent.
(10) From April 17, 2034, to April 16, 2035: four percent.
(11) From April 17, 2035, to April 16, 2036: four percent.
(12) From April 17, 2036, to April 16, 2037: six percent.
(13) From April 17, 2037, to April 16, 2038: six percent.
(14) From April 17, 2038, to April 16, 2039: seven percent.
(15) From April 17, 2039, to April 16, 2040: seven percent.
(16) From April 17, 2040, to April 16, 2041: seven percent.
(17) From April 17, 2041, to April 16, 2042: nine percent.
(18) From April 17, 2042, to April 16, 2043: nine percent.
(19) From April 17, 2043, to April 16, 2044: eleven percent.
(20) From April 17, 2044, to April 16, 2045: eleven percent.
(21) From April 17, 2045, to April 16, 2046: thirteen percent.
(22) From April 17, 2046, to April 16, 2047: thirteen percent.
(23) From April 17, 2047: fifteen percent.
The percentage of LNG in paragraphs (f)(1)-(23) of this Annex is
determined based on the prior calendar year's total LNG, expressed
in cubic feet, that was exported by maritime transport as reported
by the U.S. Department of Energy. The percentage value, expressed in
cubic feet, will be controlling until such annual calculation is
reported by the U.S. Department of Energy.
(g) Requirements for U.S.-Built Vessels. A U.S.-built vessel
meets the requirements described in this Annex:
(1) with respect to the requirements of paragraph (f)(1) through
(f)(4) of this Annex:
(A) if:
(i) the vessel is documented under the laws of the United
States; and
(ii) with respect to any retrofit work necessary for the vessel
to export natural gas:
(aa) such work is done in a shipyard in the United States; and
(bb) any component of the vessel listed in section (c) of this
Annex that is installed during the course of such work is
manufactured in the United States; or
(B) if:
(i) the vessel is built in the United States;
(ii) the vessel is documented under the laws of the United
States;
(iii) all major components of the hull or superstructure of the
vessel are manufactured (including all manufacturing processes from
the initial melting stage through the application of coatings for
iron or steel products) in the United States; and
(iv) the components of the vessel listed in section (h) of this
Annex are manufactured in the United States; and
(2) with respect to the requirements of paragraph (f)(5) through
(f)(22) of this Annex, if the vessel meets the requirements of
subparagraph (g)(1)(B) of this Annex.
(h) Components. The components for purposes of subparagraph
(g)(1)(A)(ii)(BB) or subparagraph (g)(1)(B)(iv) of this Annex are
the following:
(1) Air circuit breakers.
(2) Welded shipboard anchor and mooring chain.
(3) Powered and non-powered valves in Federal Supply Classes
4810 and 4820 used in piping.
(4) Machine tools in the Federal Supply Classes for metal-
working machinery numbered 3405, 3408, 3410 through 3419, 3426,
3433, 3438, 3441 through 3443, 3445, 3446, 3448, 3449, 3460, and
3461.
(5) Auxiliary equipment for shipboard services, including pumps.
(6) Propulsion equipment, including engines, propulsion motors,
reduction gears, and propellers.
(7) Shipboard cranes.
(8) Spreaders for shipboard cranes.
(9) Rotating electrical equipment, including electrical
alternators and motors.
(10) Compressors, pumps, and heat exchangers used in managing
and re-liquefying boil-off gas from liquefied natural gas.
(i) Suspension of Restriction. Paragraph (f) of this Annex will
not apply to a particular vessel for a period not to exceed three
years if the vessel owner orders and takes delivery of a U.S.-built
vessel of equivalent or greater LNG capacity, measured in cubic
feet. Vessel owners will be eligible for licensing upon order of,
and until delivery of, a U.S.-built vessel, as defined under
paragraph (g)(1)(B) of this Annex. An equivalent non-U.S. built
vessel means a vessel with an LNG capacity measured in cubic feet
capacity of equal to or less than the U.S.-built vessel ordered in
this paragraph. Proof of the order must be provided on demand, and
may include information such as order and contract information
related to the order.
(j) Suspension of Export Licenses. If the terms of paragraph (f)
of this Annex are not met, then USTR may direct the suspension of
LNG export licenses until the terms of paragraph (f) of this Annex
are met.
(k) Reporting. Beginning in the third year (April 16, 2028), the
LNG terminal must report to DOE the LNG shipments, and percentage of
LNG shipped, on U.S.-flagged, U.S.-built, and U.S.-operated vessels
consistent with this Annex.
Annex V: Tariffs on Ship-to-Shore (STS) Cranes and Cargo Handling
Equipment of China
The U.S. Trade Representative (USTR) proposes to assess
additional duties on the following products of China at the proposed
levels:
------------------------------------------------------------------------
Item HTSUS Proposed rate
------------------------------------------------------------------------
Containers.................... HTSUS 8609.00.00. 20% to 100%.
Chassis....................... HTSUS 20% to 100%.
8716.39.0090.
Chassis parts................. HTSUS 8716.90.30. 20% to 100%.
Chassis parts................. HTSUS 8716.90.50. 20% to 100%.
Ship-Ship-to-shore gantry Provided for in 100%.
cranes, configured as a high- subheading HTSUS
or low-profile steel 8426.19.00.
superstructure and designed
to unload intermodal
containers from vessels with
coupling devices for
containers, including
spreaders or twist-locks.
------------------------------------------------------------------------
USTR proposes to assess these additional duties in addition to
duties assessed under other authorities, including related to
national security, national emergency, Column 1 of the HTSUS, or
anti-dumping or countervailing duties (AD/CVD).
I. USTR proposes to apply duties to STS cranes that satisfy the
following conditions:
(1) That are products of China; or
(2) Where one or more of the following components, assembly, or
sub-assembly thereof, in the ship-to-shore crane are products of
China:
a. the main boom,
b. the trolley,
c. the spreader,
d. the cabin,
e. the legs,
f. the cable reel,
g. the power supply,
h. the bogie set and wheels, and
i. any information technology equipment; or,
(3) Where an importer cannot attest that the subject ship-to-
shore crane was not manufactured by a company owned or controlled by
a Chinese person, then the
[[Page 17125]]
article would be declared as a crane of China for these purposes. To
satisfy this requirement to fall, an importer would have to prepared
to demonstrate, if required by U.S. Customs and Border Protection,
that
a. The ship-to-shore crane(s) that was/were entered into the
customs territory of the United States at entry were not
manufactured, assembled, or made using parts or components from
China;
b. The ship-to-shore crane(s) were not manufactured by a company
or other entity that is owned or controlled by a Chinese person or
legal entity, or subject to the effective control of a Chinese
person or legal entity;
c. No component or assembly of the ship-to-shore crane(s)
transited through, or was stored in, any territory of the People's
Republic of China, including any free trade zone; and
d. No component, sub-assembly, or assembly of the ship to shore
crane(s) will be installed by an employee or contractor of a company
or other entity that is owned or controlled by a Chinese person or
legal entity, or subject to the effective control of a Chinese
person or legal entity.
II. For these purposes of this Annex, the following meanings
apply:
A ``company or other entity that is owned or controlled by a
Chinese person'' means:
(1) an entity or instrument of the People's Republic of China,
(including the Government of the People's Republic of
China);[FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][NOTICES][NOTICE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/
SUBJECT][/PREAMB][SUPLINF][HED]*[/HED][EXTRACT][P]*[/P]
(2) A natural person who is a citizen of the People's Republic
of China;
(3) A partnership, association, corporation, organization, or
other combination of persons organized under the laws of or having
its principal place of business in the People's Republic of China;
(4) An entity organized under the laws of the United States or
any other jurisdiction that is subject to the ownership, control, or
direction of another entity that qualifies under subparagraphs
II.(1)-(3) of this section. An entity is ``subject to the ownership,
control, or direction of'' another entity if:
(A) 25 percent or more of the entity's board seats, voting
rights, or equity interest are cumulatively held by that other
entity, whether directly or indirectly via one or more intermediate
entities; or
(B) the entity has entered into a licensing arrangement or other
contract with another entity (a contractor) that entitles that other
entity to exercise effective control over the manufacturing or
assembly (collectively, ``production'') of a ship-to-shore crane,
its components, or other materials that would be attributed to the
entity.
``Government of the People's Republic of China'' means:
(a) A national or subnational government of the People's
Republic of China;
(b) An agency or instrumentality of a national or subnational
government of the People's Republic of China;
(c) A dominant or ruling political party (e.g., Chinese
Communist Party (CCP)) of the People's Republic of China; or
(d) A current or former senior foreign political figure of the
People's Republic of China.
``Senior foreign political figure'' means
(a) a senior official, either in the executive, legislative,
administrative, military, or judicial branches of the People's
Republic of China (whether elected or not),
(b) a senior official of a dominant or ruling foreign political
party (e.g. CCP), or
(c) an immediate family member (spouse, parent, sibling, child,
or a spouse's parent and sibling) of any individual described in (a)
or (b) of this definition.
In order to be considered ``senior,'' an official should be or
have been in a position of substantial authority over policy,
operations, or the use of government-owned resources.
``Indirect control.'' For purposes of determining whether an
entity indirectly holds board seats, voting rights, or equity
interest in a tiered ownership structure:
(a) If a ``parent'' entity that qualifies under subparagraphs
II.(1)-(3) of this section directly holds 50 percent or more of a
``subsidiary'' entity's board seats, voting rights, or equity
interest, then the parent and subsidiary are treated as equivalent
in the evaluation of control, as if the subsidiary were an extension
of the parent. As such, any holdings of the subsidiary are fully
attributed to the parent.
(b) If a ``parent'' entity that qualifies under subparagraphs
II.(1)-(3) of this section directly holds less than 50 percent of a
``subsidiary'' entity's board seats, voting rights, or equity
interest, then indirect ownership is attributed proportionately.
``Effective control.'' For purposes of determining whether an
entity has effective control, an entity that qualifies under
subparagraphs II.(1)-(3) of this section that has a contractual
relationship to determine the quantity or timing of production; to
determine which entities may purchase or use the output of
production; to restrict access to the site of production to the
contractor's own personnel; or the exclusive right to maintain,
repair, or operate equipment that is critical to production, is
deemed to have effective control over an entity.''
Note: The product descriptions that are contained in this Annex
are provided for informational purposes only, and are not intended
to delimit in any way the scope of the action. In all cases, the
formal language in Annex A governs the tariff treatment of products
covered by the action. Any questions regarding the scope of
particular HTS subheadings should be referred to U.S. Customs and
Border Protection.
------------------------------------------------------------------------
HTSUS subheading or statistical
reporting No. Product description
------------------------------------------------------------------------
8609.00.00........................ Containers (including containers for
the transport of fluids) specially
designed and equipped for carriage
by one or more modes of transport.
8716.39.0090...................... Trailers and semi-trailers; other
vehicles, not mechanically
propelled; and parts thereof;
other; other.
8716.90.30........................ Trailers and semi-trailers; other
vehicles, not mechanically
propelled; and parts thereof,
castors, other than those of
heading 8302.
8716.90.50........................ Trailers and semi-trailers; other
vehicles, not mechanically
propelled; and parts thereof, other
parts.
8426.19.00........................ Ship-to-shore gantry cranes,
configured as a high- or low-
profile steel superstructure and
designed to unload intermodal
containers from vessels with
coupling devices for containers,
including spreaders or twist-locks.
------------------------------------------------------------------------
[FR Doc. 2025-06927 Filed 4-22-25; 8:45 am]
BILLING CODE 3390-F4-P