The U.S. government is considering imposition of substantial fees on vessels docking in U.S. ports that are part of any fleet that includes ships built or flagged in China. This initiative is in sync with an investigation by the U.S. Trade Representative which highlighted China's significant control over the maritime sector, presumably with an adverse impact on U.S. economic and national security interests. While the final fee amount has not been revealed yet, reports suggest they could range from $1 million to $1.5 million per port call.
China's shipbuilding industry has experienced remarkable growth, now accounting for over 50% of global merchant vessel cargo capacity, a significant increase from 5% in 1999. This expansion includes cargo ships, but also includes the construction of specialized vessels, such as very-large ethane carriers (VLECs) and ultra-large ethane carriers (ULECs).
If ethane carriers are not exempted from the new rules, the proposed fees could have detrimental effects on U.S. ethane exports. The U.S. is the only exporter of ethane and has seen a substantial increase in ethane exports over the past decade from zero in 2013 to 500 Mb/d in 2024. China is the largest importer, accounting for 46% of U.S. ethane exports in 2024, or 227 Mb/d. Given that Chinese shipyards are expected to construct most new ethane carriers, imposing fees on these vessels will severely disrupt the supply chain and increase transportation costs.
