US proposes holding China-linked ship fees until 9 January 2027

The Office of the US Trade Representative has proposed holding China-linked port fees until 9 January 2027, another two months past the current pause. The Federal Register notice is scheduled for publication on 26 October. Comments are due by 5 pm Eastern Time on 30 October under docket USTR-2026-0694¹.

Under the proposal, nothing would change for cargo moving on 10 November. Shipping companies would not incur liability for fees under Annexes I, II and III of the original Section 301 action from 10 November 2026 through 9 January 2027. The suspension would also continue to cover certain duties on ship-to-shore cranes and cargo-handling equipment¹. The existing pause expires on 9 November¹.

The extension is a proposal, not a decision. USTR said it is continuing to engage with China "with the goal of obtaining the elimination of the acts, policies, and practices at issue in the investigation"¹. The notice does not address whether China will extend its own suspension of retaliatory fees on US-linked vessels¹.

What would come back in January

The fees were collected once before, and briefly. Washington began collecting them on 14 October 2025 and suspended them on 10 November, so they were in effect for less than four weeks¹. The pause followed an agreement between President Donald Trump and President Xi Jinping reached in South Korea¹.

The scope is the ship, not the cargo. The measures cover Chinese-owned, Chinese-operated and Chinese-built vessels calling at US ports, plus certain foreign-built vehicle carriers¹.

The sums were large even in that short window. Matson, a US carrier, put its bill for reciprocal Chinese port fees at $6.4 million. COSCO, the Chinese state line, was estimated to face $1.5 billion a year in US charges¹.

Some in Washington want the fees back. In June, Senators Mark Kelly and Elizabeth Warren urged the administration to reinstate them immediately. "Section 301 port fees are critical to revitalizing U.S. shipbuilding," they wrote to USTR Jamieson Greer. They noted that Chinese yards account for more than half of global commercial vessel production, against 0.1% for the United States¹.

Much of the industry wants the opposite. On 23 September, 209 US federal and state trade associations signed a letter asking USTR to extend the suspension². The World Shipping Council, which represents container and vehicle carrier lines, was among the signatories, and the letter called the measures the Section 301 China-built vessel fees². The International Chamber of Shipping and the World Shipping Council welcomed last year's pause, warning that competing US and Chinese measures risked raising transport costs and disrupting trade¹.

A much larger fee, charged by weight

The China-specific fees are not the biggest item in play. Under its Maritime Action Plan, the administration is considering fees on all foreign-built commercial vessels calling at US ports, with proceeds supporting a proposed Maritime Security Trust Fund¹.

The plan outlines fees of 1 cent to 25 cents per kilogram of imported cargo. The administration estimated that the top of that range could raise as much as $1.5 trillion over 10 years¹. Because the charge is per kilogram, it would fall hardest on dense, low-value cargo.

The status is early. The Maritime Action Plan was set up by an executive order signed in April 2025, which also established the Maritime Security Trust Fund and set out goals for reviving US shipyards³. The notice now on the table deals only with the China-specific suspension¹. The plan itself is described as under consideration rather than as a formal proposal¹.

Scale explains why such a fee would reach far beyond China. The White House says China builds 74% of the world's ships and the United States 0.2%³. BIMCO puts Chinese yards' share of the container ship orderbook at 81%, and at 72% or more in every other major sector, including ro/ros⁴. The International Chamber of Shipping has warned that broad charges could significantly increase shipping costs and disrupt global trade¹.

What it means for India cargo

Section 301 fees attach to the vessel, not to where the goods were made. Indian exporters and importers are exposed whenever their carrier deploys China-linked tonnage to a US berth¹.

Vehicle carriers are the segment to watch for car exports. USTR's action reaches certain foreign-built vehicle carriers as well as China-linked ships¹. ACL, whose ships USTR classified as vehicle carriers, said the designation caught vessels that carry almost no cars. "ACL's unique ships were mistakenly classified by USTR as vehicle carriers even though only 1% of its cargo is automobiles," chief executive Andy Abbott said¹. He added: "Our largest US container and heavy machinery customers were panicking that we would redeploy our ships out of the US trade to the booming China trade"¹.

Freight costs are moving the other way for now. Spot rates from India to the US east coast have dropped by up to $3,000 per FEU in the past two to three weeks, with booking activity slowing, JOC reported⁵. That gives buyers room in fourth-quarter talks, but the January decision is the one that will shape 2027 costs.

What to watch

Three dates matter: publication scheduled for 26 October, comments closing on 30 October, and the pause ending on 9 November¹. If USTR finalises the extension, the next decision point is 9 January 2027¹.

Watch Beijing as well. Because the notice is silent on China's own suspension, a US extension does not guarantee that both sets of fees stay off¹.

And watch whether the Maritime Action Plan becomes a formal proposal. If it does, the charges would apply to all foreign-built commercial vessels rather than only China-linked ships, and the comment process, rather than the calendar, becomes the place for buyers to make their case¹.