A proposed US levy on all Chinese ships would hurt trans-Pacific trade, Shipping Australia says. Photo: freepik
An American proposal to impose up to $3m in levies on all Chinese-owned and made ships docking in US ports is a threat to Australian exports.
That is the position of Shipping Australia, who are among US and global organisations to file a submission to the Office of the US Trade Representative (OTR).
The OTR is weighing up a proposal to levy the fees which have already been met with strong condemnation, incredulity and predictions of widespread economic damage.
Shipping Australia says it would make trading to US ports prohibitive for China, and for those who operate Chinese-made vessels.
PROPOSED PENALTIES
- US$1m (A$1.59m) per call by a Chinese-owned or made vessel at a US port; or
- US$1000 ($1590) per net tonne of the docking vessel; and
- an extra US$1.5m ($2.39m) per visit by a Chinese vessel; and
- a sliding fee of up to US$1m (1.59m) per call if a shipping company has more than half of its new ship orders with a Chinese shipyard and scheduled for delivery over the next 24 months.
Reactions from US politicians, trade, freight and transport groups who made submissions described the proposal as “catastrophic”, “devastating”, “disastrous miscalculation” and “ridiculously stupid” in just a small selection of public submissions.
In Shipping Australia’s submission, CEO Captain Melwyn Noronha says such fees would harm Australian exports, specifically beef, lamb and goat meat.
“With the high volumes of perishable goods i.e. meat, in Australia-US trade, there is a requirement for ships on that trade to have a high number of refrigerated container plug-in points,” he wrote.
“This requirement that naturally arises out of the demands of the trade would likely make it quite difficult to replace China-built vessels with US-built ships.”
He says any increase in maritime supply costs would see Australian exporters turn away from the US to other markets.
Captain Noronha says that in the 2023-24 financial year, Australia exported $37.5bn of goods and services to the US and imported $88.2bn in turn.
In 2024, Australia exported 394,716 tonnes of beef, 104,210 tonnes of sheep meat and 22,559 tonnes of goat meat to the US, he wrote, citing Meat & Livestock Australia as the source for those figures.
GLOBAL IMPACT
Shipping Australia said it stood by the likes of the International Chamber of Shipping, World Shipping Council, BIMCO and other global organisations.
These organisations warn that such penalties would double freight rates, see many smaller ports and terminals bypassed by overseas vessels in favour of larger ports creating widespread port congestion and a widespread halt to shipping with the US.
Shipping Australia also noted that a great many ships, and fleets, would be affected with some sectors shutting down and hurting shipping on the trans-Pacific trade.
“… the policy as proposed would penalise owners and operators that built ships in Chinese yards when there were no real US shipbuilding options during the time of contracting to build the vessel,” its submission read.
“In such cases, we argued that it would be considerably just, fair, and reasonable, to provide exemptions from the policy for such vessels and to only have penalties apply to vessels built from a future date.”
China reportedly builds more than half of the global commercial ships while the US share has fallen so far, it poses serious economic and national security challenges, Associated Press reports.
