Growth Energy Urges USTR to Change Course on Proposed Shipping Rules

WASHINGTON, D.C.-Growth Energy, the nation's largest biofuel trade association, submitted comments to the U.S. Trade Representative (USTR) today, urging the agency to change course and either revise or remove new recently-proposed rules aimed at combating China's efforts to dominate global shipping.

In April 2024, USTR began a Section 301 investigation into China's practices that target the maritime, logistics, and shipbuilding sectors for dominance. USTR ultimately found that China's efforts to maintain a competitive advantage in these three sectors were "unreasonable" and that they "burden or restrict U.S. commerce." In response to this finding, USTR proposed new fees that would increase the cost of shipping U.S. goods using Chinese vessels, and impose new restrictions on shipping that would effectively mandate that all U.S. goods be exported on U.S.-flagged, U.S. built vessels, with only limited exceptions.

"The noted fees and costs of compliance with the proposed requirements to use U.S.-flagged and operated vessels will be significant and result in higher, less-competitive prices and decreased demand for U.S. exports while also increasing the price of imported inputs for ethanol's production. This will upend domestic supply chains while increasing port consolidation, port congestion, costs, other compliance requirements, and clearance time by customs that will add to the burden and cost of producing and exporting U.S. ethanol," said Growth Energy Senior Vice President of Regulatory Affairs Chris Bliley in submitted comments. "Some of our members are already experiencing reluctance from shippers to enter future transactions without shouldering the risk associated with this proposal. At the same time, other countries are taking actions to ease the cost of trade and expand their ethanol exports-most notably, Brazil is currently seeking a trade agreement with the European Union (EU) that would give their ethanol industry greater, easier access to that market."

"As a result of the potential harm to the U.S. ethanol industry, we ask for you to remove the proposed fees and restrictions on services," the comments concluded. "These new requirements would cause a significant upheaval that American producers can ill afford."

Growth Energy has also signed onto other comments urging USTR to change course, including a coalition letter signed by 317 trade associations submitted by the National Retail Federation (NRF) outlining the damage the proposed fees and restrictions would do to American commerce.

Exports of U.S. ethanol set a record in 2024, shipping 1.9 billion gallons worth $4.3 billion. During the same period the American ethanol industry maintained a $3.9 billion trade surplus.

Read Growth Energy's full comment here.