There appear to be problems with President Donald Trump’s plan to revive US shipbuilding by imposing large fees on China-linked ships that carry cargo to American ports.
Trump’s plan to charge Chinese vessels a fee of about $1.5 million is looking uncertain because exporters are struggling to find US-built or US-flagged ships to send goods abroad.
And that is causing US coal inventories to swell and stoking uncertainty in the embattled agriculture market, according to a report by Reuters.
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Trump is drafting an executive order that would rely on funding from a US Trade Representative proposal to levy fees of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China.
Those potential port fees have limited the availability of ships needed to move agriculture, energy, mining, construction and manufactured goods to international buyers, according to major US exporters and transportation providers in interviews with Reuters, letters to US officials, and comments ahead of USTR hearings next week.
Vessel owners refusing to ship US coal
Vessel owners have already refused to provide offers for future US coal shipments due to the proposed USTR fees, Xcoal Energy & Resources CEO Ernie Thrasher said in a letter to US Department of Commerce Secretary Howard Lutnick dated March 12 and seen by Reuters.
Enacting and implementing those fees could cease exports of US coal within 60 days, putting $130 billion worth of shipments at risk, Thrasher said. He said the fee structure could add up to 35% to the delivered cost of US coal, making it uncompetitive on the global market.
“The loss of direct and indirect jobs would be catastrophic,” said Thrasher, who confirmed sending the letter and said he has not received a response.
The letter from Pennsylvania-based coal marketer Xcoal and comments from agriculture representatives showing tangible impacts from the proposed fees have not previously been reported.
Coal mines in West Virginia are also preparing to lay off miners as unsold coal inventories pile up, Chris Hamilton, CEO of the West Virginia Coal Association, told Reuters. He did not provide specifics.
No US-made or flagged LNG carriers too
The proposed fees could also make it harder for the US to export other energy products like oil, liquefied natural gas, and refined fuels, the American Petroleum Institute, the powerful oil industry lobbying group, said in comments submitted to the USTR dated March 10.
The USTR proposal also seeks to shift domestic exports to ships that are both flagged and built in the United States. The current fleet of US-flagged cargo vessels numbers less than 200, and not all were built in the US.
Very few maritime operators will be able to document that their annual share of US exports meets the required 20% carried on US-built, US-flagged vessels, shipping association BIMCO said in USTR comments on Monday (March 17).
That could meaningfully curtail US energy exports – “specifically liquid natural gas (LNG) as no US built, US flagged LNG carriers are in operation nor on order,” said BIMCO, which added that chemical exports could be severely affected as well.
Retaliatory tariffs threat hitting farm exports
US farmers, who are already getting pummelled by retaliatory tariffs from China, Mexico and Canada, also are caught in the crossfire of the Chinese ship fee fight, the American Farm Bureau Federation said.
The inability to secure ocean freight transportation from May and beyond has restricted their ability to sell bulk US agricultural products like corn, soybeans and wheat because exporters are unsure what the final cost would be, three US grain export traders told Reuters.
The United States exported more than $64 billion in bulk crops, bulk animal feed and vegetable oils in 2024, according to US Census Bureau Trade data. The North American Export Grain Association, which represents crop commodities exporters, will participate in next week’s hearing.
Bulk agricultural exporters could face an additional $372 million to $930 million in annual transportation costs from the fees, the Farm Bureau said. That would represent a substantial margin loss in global markets where competitiveness is often determined by mere pennies per bushel.
US agricultural exporters get an edge over global rivals by leveraging a cost-effective and efficient domestic transportation system for moving products to market, said Alexa Combelic, the American Soybean Association’s executive director of government affairs.
“When you add costs to that efficient system, it’s no longer efficient. We no longer have the competitive edge,” Combelic said.
Reuters with additional editing by Jim Pollard
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