Taxes on ships built in China would push up container rates force a rethink of routes into the US, Soren Toft said
US plans to impose new fees on vessels operated by Chinese ship operators or built in China calling on American ports to counter China’s dominance in the maritime sector will have major consequences for global shipping, according to one of the world’s largest shipping lines.
Soren Toft, CEO of MSC, said the taxes proposed by the US on ships built in China and the shipping lines that own them could boost container shipping rates by 25 per cent if they are applied.
“If it comes out in the current form, it will have significant consequences. In that case, we will either have to review our network and withdraw the coverage, or we will have to add that cost,” he told Bloomberg. “Ultimately, the consumer will have to pay.”
The measures are an attempt by Trump to reduce China’s dominance of the US$150bn global ocean shipping industry.
As reported by Mundo Marítimo, after an investigation initiated during the Joe Biden government in the US, the Trump administration is proposing an increasing scale of taxes for the use of merchant ships from China. The plan would also require that a portion of goods exported by the US be transported on American ships.
“Shipping lines typically call at multiple ports when unloading goods in the US. If they are charged a million-dollar fee for each call, they will likely redesign routes to make fewer calls, eliminating smaller ports,” Toft said.
“The peripheral ports will be at risk. Smaller locations, including the Port of Oakland, have been vital to US agricultural exports and other commodities.”
He quoted a World Maritime Council assessment of the USTR proposal and estimated that the total impact on the industry would likely be more than US$20bn, potentially translating into an additional US$600 to US$800 per container.
