U.S. Policy on Chinese Ships to Trigger Global Shipping and Shipbuilding Turbulence

The U.S. Trade Representative’s Office (USTR) has proposed imposing a high port fee of up to $1.5million per call on ships built or operated by China, a policy that has sparkedintense controversy among global industrial and trade groups. Below is ananalysis of the impact of this policy on the global shipbuilding industry andshipping market:

Impact on the Global Shipbuilding Industry

1. Market Share Redistribution: China’s shipbuilding industry accounts for more than 50% of the globalmarket share. The USTR’s proposal may lead someshipowners to shift new shipbuilding orders to Japan, South Korea, Vietnam, orTurkey, thereby driving up shipbuilding prices in these regions. However, dueto China’s advantages in cost and technology, such ashift may not be easy to achieve.

2. Technological Innovation andCompetitiveness: Despite the short-term pressure this policy may impose onChina’s shipbuilding industry, it may encourage Chineseshipbuilding enterprises to accelerate technological innovation and enhancecompetitiveness to meet the challenges of the international market in the longterm.

3. Global Supply Chain Disruption: China’s position in the global shipbuilding industry means that any policytargeting China may disrupt the global shipbuilding supply chain. Shipownersmay need to reassess their fleet structures, which could lead to instability inthe global shipbuilding market.

Impact on the Shipping Market

1. Increased Shipping Costs: The USTR’s proposal will directly lead to a significant increase in voyagecosts for shipping enterprises. It is estimated that the cost of each containermay increase by $600 to $800, and these additional costs may be passed on toimporters and exporters, further driving up global trade costs.

2. Changes in Market Competition Landscape:Some shipping enterprises may adjust their routes or fleet structures due tohigh fees, which could lead to changes in the market competition landscape.Those operators relying on non-Chinese-built ships may gain an unfairadvantage, but this requires sufficient non-Chinese-built ships to meet demandglobally.

3. Supply Chain Stability Threatened: Theuncertainty of the policy has already begun to impact supply chains. Shippingcompanies, traders, and port authorities have stated that if this fee mechanismis implemented, its impact will be transmitted along the supply chain,affecting exporters and even end consumers.

4. Impact on the U.S. Domestic Economy:This policy may lead to increased shipping costs in the United States, therebyexacerbating inflationary pressures. It is estimated that U.S. consumers mayhave to pay an additional $30 billion in taxes annually.

Summary

The USTR’s proposalaims to reshape shipping rules through economic leverage, using nationalsecurity as a pretext for strategic containment. However, this policy maytrigger a surge in global shipping costs and supply chain chaos, and it mayalso have negative impacts on the U.S. economy. In the context of a globallyinterconnected economy, the implementation of this policy may evolve into a"prisoner’s dilemma" with no winners,highlighting the necessity of multilateral cooperation and comprehensive strategy.