Policy & Compliance
US tonnage taxes on Chinese- owned and Chinese-built vessels come into effect this month USTR update on Tonnage Tax
U nder Section 301 of the Trade Act of 1974, the of fi ce of the US Trade Representative (USTR) initiated an investigation in the last year of President Biden’s presidency into China’s Targeting the Maritime, Logistics and Shipbuilding Sectors for Dominance. This led to President Trump issuing an executive order on 9 April 2025 aiming to make US- fl agged and built vessels commercially competitive in international commerce. The order, Restoring America’s Maritime Dominance, should be read alongside The SHIPS for America Act which aims to build upon this levelling of the competitive playing field, mainly with China, to encourage the building of a new American merchant marine in American shipyards. After the investigation, the US Trade Representative (USTR) proposed the introduction of a tonnage tax. This is in effect a service fee bases on the net tonnage of any vessel with a Chinese operator or owner, nor non-Chinese carriers operating Chinese-built vessels, when the vessel arrives at a US port. This includes entities based in mainland China, Hong Kong and Macau. Since the original proposals were introduced, they have been watered down to some extent. For instance the original proposals included the provision to charge vessels for every port called at in the US. Now the charge is assessed per rotation or string of port calls. There are several exemptions from the tonnage tax; for instance vessels with a capacity of less than 4,000 TEU entering a US port, and we currently believe for non- Chinese operated vessels from a voyage of less than 2,000 nautical miles from a foreign point. Also, certain specialised vessels, those where the operating company is controlled by US citizens, and ‘lakers vessels’. The service fee was actually introduced on 17 April 2025, but
Tonnage tax on Chinese vessel operators and owners
Effective Date 17 April 2025 14 October 2025 17 April 2026
Tonnage Tax (USD per net tonne)
0
50 80 110
17 April 2027 17 April 2028
140
“ Members should check their contracts with clients and advise them of the developing situation. Under BIFA STC both the 2021 and 2025 edition Members do have the contractual
there is a 180-day exemption period ending on 13 October 2025, after which charges will apply. Tonnage tax on Chinese vessel operators and owners The amount of tonnage tax charged is based upon the vessel’s net tonnage. The service fees will increase as per the table above. It is important to note that each vessel will be charged for five visits per year. Tonnage tax on operators of Chinese-built vessels This tonnage tax is imposed on non-Chinese carriers operating Chinese-built vessels, when this vessel arrives at a US port. The amount of tax will be the higher of a fee levied on the net tonnage of the vessel or the fee for each container discharged. This is of
particular concern because it could create a variable charging system. The table below shows the sharp rate of increase between 2025 and 2027. Each vessel will be charged for up to five calls per annum In many ways, Members’ actions are limited and much will depend on the decisions of shipping lines regarding whether or not to pass on the additional fees. Other steps to mitigate the impact of the additional charges may include reallocating vessels to different routes or, in the case of non- Chinese vessel operators, taking advantage of the 2,000 nautical mile exemption. Also, Members should check their contracts with clients and advise them of the developing situation. Under BIFA STC, both the 2021 and 2025 editions, Members do have the contractual right to recover these additional sums where a carrier or shipping line charges them.
right to recover these additional
Tonnage tax on operators of Chinese-built vessels
Effective Date
Tonnage Tax
Per Container (USD per TEU)
sums where a carrier or shipping line charges them
(USD per net tonne)
17 April 2025 14 October 2025 17 April 2026
0
0
18 23 28 33
120 153 195 250
17 April 2027 17 April 2028
22 | October 2025
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