Policy & Compliance
A COSCO vessel at the Port of Oakland
While President Trump’s trade tariffs have been capturing the headlines, the proposed SHIPS Act, which will penalise Chinese-linked vessels, also has major long-term implications for trade and ultimately the consumer Layers of protectionism
S ince the US Presidential election and inauguration of Donald Trump, US trade policies have been regularly in the news. In effect we are seeing layers of protectionism being introduced, both on goods and commodities and the means by which to move them. It should be remembered that at least some of the initiatives announced by the Trump administration had their roots in the last months of the Biden administration and have broad cross-party support. As a first step, the US ended its duty-free ‘de minimis exemption’ for low-value goods (under $800) from China and Hong Kong on 2 May 2025. This means that packages valued under $800 from these countries will now be subject to a 120% tariff or a flat fee (starting at $100, rising to $200 in June). The move was driven primarily by concerns about the illegal importation of synthetic opioids and the alleged exploitation of the de minimis exemption by Chinese e-commerce firms. Subsequently the US administration has introduced a raft of additional tariff measures imposing additional duty rates on many imports, regardless of origin. For imports from China, a duty rate of 145% was introduced, subsequently reduced to 30% for a 90-day period to allow for negotiations between the two countries.
In retaliation, China imposed a minimum 125% tariff on US goods and restricted exports of rare earths critical to high-tech industries. We have seen these tariff levels reduced for 90 days by the Chinese to 10%. The big question is: “What if at the end of 90 days the two countries have not concluded a negotiated trade agreement?” Imposing a tonnage tax So far, we have looked at protectionism as imposed on goods being traded – but what of the additional measures levied on the mode of transport? The US Trade Representative (USTR), on 17 April 2025, announced its final proposed measures regarding fees to be charged on Chinese-linked ships. These imposed, in effect, a tonnage tax on all non-US-built ships berthing at a US port. The proposals were less punitive that many had originally envisaged – all foreign built vessels will incur additional charges. Beginning 14 October 2025, a considerably higher fee will be imposed on the entry of a Chinese-owned or operated vessel (regardless of where it was built) into a US port at a rate of $50 per net ton (as opposed to $18 per ton for non-Chinese
12 | July 2025
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