Clarksons Research: Analysis of the Impact of USTR's Restrictive Measures

On April 17, the Office of the United States Trade Representative (USTR) officially announced the results of the 301 investigation into China's shipping, logistics and shipbuilding, proposing the latest restrictive measures. The relevant measures will be implemented in stages, including the collection of port fees on ships operated/owned by Chinese entities and ships built in China, as well as special plans for specific ship types. Clarkson Research will conduct further data analysis and interpretation of the latest restrictive measures and the differences with the original proposal.

Taking into account the frequency of current policy updates, the instability of market changes, and the diversity of industry clients' focus, Clarkson Research will provide independent data and market consulting to clients.

Shipping Background 1. US Ports

Under the background of the new restrictions, the scope of affected ships and port calls has been greatly reduced. According to Clarksons Research data, based on international ships, 7,853 of the total number of ships calling at US ports in 2024 may be affected by the new restrictions. Compared with the original proposal that affected 43% of the ships, the new restrictions only affect 9% of all international ships calling at US ports.

By vessel type, the percentage of calls by vessels affected by the restrictions at U.S. ports is as follows: 7% for container ships (a total of 1,201 calls at U.S. ports, far lower than the 83% affected by the original proposal), 7% for LPG carriers, 9% for bulk carriers, 6% for crude oil tankers and 3% for product tankers.

Clarksons Research opens subscriptions to ship type fleet, shipowner data and port modules to Chinese customers.

Shipping Background 2. Chinese Shipowners

The new restrictions impose higher charges on some Chinese-owned vessels than previously estimated. The fees imposed on Chinese-owned vessels (currently usually calculated based on the net tonnage of the vessel) will not be capped, with the original proposal capping each category at $1.5 million. Some large vessels could face millions of dollars in fees, for example, Chinese-owned VLCCs could face up to $14.5 million in fees by 2028, and Chinese-owned 14,000TEU container ships could face up to $9 million in fees.

According to Clarksons Research data, Chinese entities currently operate/own ships in the global fleet for 15%, including 32% for bulk carriers, 19% for tankers, and 25% for container ships. Clarksons statistics show that in 2024, the number of affected Chinese entities operating/owning ships that docked at US ports was 3,351 times, involving a total of 121 Chinese shipowners (non-group companies), of which the top ones were mostly Chinese state-owned traditional shipowners and financial shipowners. However, considering the high port docking fees for Chinese shipowners, some Chinese entities operating/owning ships will have to face redeployment and transfer to operating markets outside the United States. It is worth noting that in 2024, no car carriers unloading at US ports were owned/operated by Chinese shipowners. The current attitude of international shipowners remains to be seen.

Shipping Background 3. Chinese Shipbuilding

The new restrictions no longer take into account the proportion of Chinese-built ships in shipowners' new shipbuilding plans or fleets, and also introduce a number of important exemptions for fees levied on Chinese-built ships. These mainly include small ships and ships sailing short distances, ships arriving at US ports in ballast or empty. The restrictions have special plans for LNG carriers and car carriers. According to Clarksons research data, there is only one ship built by a US shipyard in the global car carrier fleet, so there is limited room for "replacing" car carriers.

According to Clarksons Research, the current fleet of ships built in China accounts for 23% of the global fleet, including 48% for bulk carriers, 28% for tankers, and 39% for container ships. The current proportion of orders held by Chinese shipyards has risen sharply to 60%+. According to the latest measures, taking container ships as an example, 72% of the global orders for container ships above 4,000TEU are owned by Chinese shipyards, involving 17 shipbuilding groups/27 single-unit shipyards. Although some shipowners may want to retain trade flexibility for some goods, overall, the direct impact of these restrictions on new shipbuilding decisions has weakened. With limited shipyard capacity and attractive pricing options, it will help to attract new shipbuilding orders outside China to a certain extent in the short term; in the long term, ships flying the US flag and the US shipbuilding industry may begin to grow (combined with the relevant plans of the US to revitalize the shipbuilding industry). LNG carriers and car carriers are currently the focus.