Chemicals Update – Those Scary US Port Fees Part II

On 17 April, the day before this year’s Good Friday, the USTR published its proposed actions designed the counter China’s dominance in the maritime, logistics and shipbuilding sectors. To much of the industry’s relief, the proposed measures are much softer than the originally floated idea of up to $1.5 million per port call. Nevertheless, the proposed measures still pack a punch.

Below are some thoughts on how we expect this regulation to affect the chemical tanker market.

To begin with, the proposed fees are not final. There is another period for comments and public hearing between 17 April and end of May, after which the final decision will be made.

As of now the proposed fees are grouped into four categories, each in an annex of its own. It is important to note that the fees in the annexes are not cumulative – to quote directly from the text “either a vessel is subject to the fees set forth in Annexes I, II, or III, or, a vessel is subject to the requirement of Annex IV.”

For anyone who is interested, the full text of the document published by the Office of USTR can be found here: https://ustr.gov/sites/default/files/files/Press/Releases/2025/301%20Ships%20-%20Action%20FRN%204-17.pdf

The provisions concerning the chemical tanker fleet are in Annex I and Annex II. A short summary of these is as follows below. A vessel that meets the conditions of Annex I, e.g., a vessel operated by a Chinese entity or owned by a Chinese entity, will be subject to the fee imposed under Annex I. A vessel may be subject to Annex II when Annex I does not apply.

1. Annex I: Service Fee on Chinese Vessel Operators and Vessel Owners of China

• • Applies to vessels owned or operated by entities with significant ownership, control, or ties to the PRC, Hong Kong, or Macau, including through citizenship, location of business, governmental influence, or military affiliations, particularly where 25%+ ownership or control exists, or government oversight is present in key operations.
  • Upon or before the entry of a vessel at the first U.S. port or place from outside the Customs territory on a particular string, the vessel operator must pay up to 5 times per year per vessel:
    1. Effective as of April 17, 2025, a fee in the amount of $0 per net ton for the arriving vessel.
    2. Effective as of October 14, 2025, a fee in the amount of $50 per net ton for the arriving vessel.
    3. Effective as of April 17, 2026, a fee in the amount of $80 per net ton for the arriving vessel.
    4. Effective as of April 17, 2027, a fee in the amount of $110 per net ton for the arriving vessel.
    5. Effective as of April 17, 2028, a fee in the amount of $140 per net ton for the arriving vessel.

As per our count, this affects 231 ships above 12,000 dwt but only 71 of these ships have actually called US ports in the last year and half have called US ports.

But the trend has been on the decline since the summer of 2024. Since the beginning of this year the drop has become even more pronounced on reduced cargo flows due to tariffs and increased US policy uncertainty.

Has there been any material impact on the freight rates from fewer Chinese-operated or -owned vessel calling US ports? Not really – and the reasons for this is that such vessels make up a negligible portion of all vessels calling the US. As such they are easily replicable by other ships, especially in the current market which is operating already well below full capacity.

Anyway, for theoretical and reference purposes only, below is an approximate calculation of the fees that would be payable by vessels owned or operated by Chinese companies. It is noteworthy that in its current form, the USTR proposal does not make any difference if the vessel is calling a US port to load a full or part cargo – the applicable fee seems to be the same. The fees per metric ton show that Chinese operators are priced out of the US market.

2. Annex II: Service Fee on Vessel Operators of Chinese-Built Vessels:

• • Applies to Chinese-built vessels, which are defined as “built in the People’s Republic of China, consistent with the definition of place of build in CBP and U.S. Coast Guard (USCG) regulations and would be so identified on the Vessel Entrance or Clearance Statement (CBP Form 1300) or its electronic equivalent.”
  • Upon or before the entry of a vessel at the first U.S. port or place from outside the Customs territory on a particular string, the vessel operator must pay up to 5 times per year per vessel:
    1. Effective as of April 17, 2025, a fee in the amount of $0 per net ton for the arriving vessel.
    2. Effective as of October 14, 2025, a fee in the amount of $18 per net ton for the arriving vessel.
    3. Effective as of April 17, 2026, a fee in the amount of $23per net ton for the arriving vessel.
    4. Effective as of April 17, 2027, a fee in the amount of $28 per net ton for the arriving vessel.
    5. Effective as of April 17, 2028, a fee in the amount of $33 per net ton for the arriving vessel.

Below is a similar calculation for common vessel sizes:

Clearly, the fees applicable under this Annex are much smaller. They are, although somewhat higher, similar in size to the fees imposed by the EU with regards to environmentally friendly fuels and ship efficiency.

But Annex II is even more relaxed, as it offers a number of exemptions. The fees stipulated in Annex II do not apply to the following Chinese-built vessels:

1. US.-owned or U.S.-flagged vessels enrolled in the Voluntary Intermodal Sealift Agreement, the Maritime Security Program, the Tanker Security Program, or the Cable Security Program;
2. vessels arriving empty or in ballast;
3. vessels with a capacity of equal to or less than: 4,000 Twenty-Foot Equivalent Units, 55,000 dwt tons, or an individual bulk capacity of 80,000 dwt tons;
4. vessels entering a U.S. port in the continental United States from a voyage of less than 2,000 nautical miles from a foreign port or point;
5. US.-owned vessels, where the U.S. entity owning the vessel is controlled by U.S. persons and is at least 75 percent beneficially owned by U.S. persons;
6. specialized or special purpose-built vessels for the transport of chemical substances in bulk liquid forms; and
7. vessels principally identified as “Lakers Vessels” on CBP Form 1300, or its electronic equivalent

These exemptions, especially in clause 3 and 6 above, mean that practically the entire IMO tanker fleet, except ships owned or operated by Chinese entities, will avoid such port fees.

Another important detail is that the current proposal does no punish owners or operators with newbuildings from Chinese shipyards – it only promises reimbursement of any paid fees, if an owner orders a new vessel from a US shipyard. But given that the vast majority of the IMO tanker fleet will pay zero or very negligible fees, it seems unlikely the US will see a wave of chemical tanker newbuilding orders.

In summary, the proposed service fees by the USTR will have minimal impact on the chemical tanker market and the fleet will be largely unaffected. That being said, owners and operators have been already alerted by the possibility of large port fees on Chinese-built tonnage. Since the original proposal was first floated, there has been a general preference by owners to avoid buying or taking on time charter Chinese-built ships – just in case. This could potentially lead to relatively lower prices or time charter rates for such vessels, but this effect may be limited. As for the freight market to and from the US, lower cargo volumes will be partly offset by the owners reluctance to send ships to the US due to the uncertainty of and the rising challenges to find cargoes, especially to Asia where China has been the major buyer.

By Plamen Aleksandrov, Head of Research – Chemicals, SSY.