US, China Extend Trade Truce But Port Fees Pending

Despite U.S. Treasury Secretary Scott Bessent saying on Sept. 23 that the United States and China agreed to extend the "Busan Agreement" trade truce, the issue of port fees on Chinese-built vessels is not finalized.

The truce, which had been scheduled to expire Nov. 10, now will be extended two months to Jan. 10, 2027. The overall extension was announced as Chinese President Xi Jinping met in Washington D.C. with President Donald Trump.

The U.S. Trade Representative (USTR) still needs to issue an official Federal Register notice, which is required to legally bind the port fee postponement.

Association Letter

The California Chamber of Commerce joined more than 200 federal and state trade associations who sent a letter to the Office of the U.S. Trade Representative, arguing that port fees on China-built vessels are not reviving U.S. shipbuilding and urging the Trump administration to extend their suspension.

"Vessel fees alone are not a strategy for rebuilding the U.S. shipbuilding industry," wrote the signatories, which span the retail, agriculture, manufacturing and logistics sectors and include the U.S. Chamber of Commerce and the National Association of Manufacturers.

"Resuming vessel fees at this time would add another cost layer to an already-strained transportation system," states the letter. "The costs would ripple across shipping networks, affect vessel deployment decisions, and increase uncertainty for businesses that have limited ability to control the ownership, operation, or construction history of the vessels used to transport their goods."

Background

The USTR opened a spring 2024 investigation at the request of the United Steelworkers and four other unions, under Section 301 of the Trade Act of 1974, as a way to rebuild the U.S. shipbuilding industry.

A January 2025 USTR 182-page report detailed the decline of U.S. shipbuilding and U.S. flag carriers, and highlighted the dramatic expansion of China's shipbuilding and ship operating sectors due to massive subsidies and preferential treatment.

Proposed remedies included significant "port service fees" against Chinese-built ships every time they enter a U.S. port. The fee also would have applied to operators with Chinese-built vessels in their fleet or having Chinese-built vessels on order. The remedy further included a requirement for U.S. exporters to export a certain percentage of goods on vessels owned, operated and eventually built in the United States.

There was a mix of support and opposition to the proposed remedies, which would have resulted in fees ranging from $1 million to $3 million - even as high as $3.5 million per port call. Unions and steel makers were supportive of the remedies, while carriers, shippers and farm exporters were strongly opposed.

However, a March 2025 study assessing the probable net economic effects of the proposed remedies found that overall, total exports and imports would decline, which would have a negative impact on the U.S. economy while the administration is striving to grow the overall economy and create jobs around the country.

All agreed that China's dominance of the shipping industry should be addressed as the United States has lost more than 70,000 jobs in the last few decades and now ranks 19th globally in shipbuilding. Further, while China builds more than 1,000 ocean vessels for commercial use per year, the United States produces fewer than 10.

Originally the United States was to begin imposing new shipping fees in October 2025 that could have increased the cost of Chinese goods and potentially reduced imports. The Trump administration then agreed to pause the fees for a one-year period that would have ended Nov.10, 2026 before the latest extension to Jan. 10, 2027.

Staff Contact: Susanne T. Stirling