The US on Oct. 14 implemented revised port fees on Chinese-linked vessels that are far less stringent than originally proposed, posing less risk to the US coal industry.

The Office of the US Trade Representative’s initial proposal, which charged up to $1.5 million per entrance of Chinese-built vessels, received major backlash from most US industry. coal producers, with their smaller cargoes and thin margins, saw the fees as an existential threat.

Final rates from the USTR drastically reduced the penalties after metals and mining companies – with the exception of domestic steelmakers – strongly opposed the USTR’s initial fees. The US port fees will charge Chinese owned or operated ships $50/net ton, rising $30 each year through 2028. Vessels will not be charged more than five times per year.

The new, reduced port fees will not have a “widespread negative effect” on the coal industry, Matt Warder, the CEO of Seawolf Research, a management consultancy and financial analytics firm.

“That has been the attitude of producers I’ve spoken with thus far,” Warder told Platts, a part of S&P Global Commodity Insights.

The USTR provided exemptions for vessels below 80,000 deadweight tons in dry bulk capacity, and for vessels arriving at ports empty or in ballast.

Warder stressed that the new fees will not be applied to empty ships arriving in the US for loading – which make up most, if not all, vessels used for coal exports.

The US coal industry relies heavily on international sales, shipping about 98.3 million metric tons of coal in 2024, including 11.9 million mt to China, or 12% of all coal exports, according to S&P Global Market Intelligence data.

The USTR first announced plans to implement port fees on Chinese-affiliated ships entering US ports earlier this year, which was prompted by an investigation under the Biden administration that determined China’s control of global shipbuilding restricts US commerce.

President Donald Trump issued an executive order on April 9 directing agencies to revitalize the domestic maritime industry by strengthening shipbuilding and addressing China’s control of the industry.

In response to the US implementing fees, China’s Ministry of Transport responded on Oct. 10 by announcing their own port fees for vessels owned, operated or built by US interests that dock at Chinese ports. Chinese-built ships will be exempt from the port fees, which mirror US rates, on US-linked vessels.

The retaliatory action comes after Trump threatened to impose an additional 100% tariff on Chinese imports and place export controls on “any and all critical software” by Nov. 1. The threat came just days after China announced it would curb exports of critical minerals.

Source: PLATTS