Shipowners and charterers are revising leasing contracts to prepare for anticipated U.S. port fees targeting Chinese-built vessels, as the Biden administration considers tariffs aimed at bolstering domestic shipbuilding.

Read also: Proposed U.S. Port Fees on Chinese Ships Could Trigger $100 Billion Shipping Shock

Although the U.S. Trade Representative (USTR) has yet to finalize its proposals, shipping firms are already incorporating protective clauses into agreements. These new provisions shift financial responsibility for any imposed levies onto charterers, either partially or in full, industry sources revealed. Some contracts mirror existing clauses used for cargo-related expenses, stipulating that charterers will cover all duties and taxes if they materialize. Others set a cap on shipowner contributions, with charterers absorbing any excess costs.

The global shipping industry has repeatedly adapted to seismic disruptions, from geopolitical conflicts in the Middle East to sanctions on Russian energy exports. However, the uncertainty surrounding the U.S. plan has sparked frustration, particularly regarding how authorities will define a “Chinese-built” vessel in regulatory terms.

Potential Cost Impact

Current USTR discussions suggest a tiered fee structure, with charges reaching up to $1 million per port visit per ship. In some cases, the cumulative cost could climb to $3.5 million per port call, depending on the ship’s ownership and order history, according to Clarksons data. Given that over one-third of the world’s commercial fleet was built in China, the policy could have widespread repercussions.

A recent USTR hearing in Washington gathered U.S. lawmakers, labor unions, steel manufacturers, and shipping executives, revealing sharp divisions over the proposed levies. While many voiced concerns over China’s shipbuilding dominance, others warned that excessive fees could disrupt supply chains and raise costs for key industries.

For high-value cargo sectors such as oil transport, companies may absorb the extra cost with minimal impact. Large container carriers, which transport up to 24,000 TEUs (twenty-foot equivalent units) per voyage, may also mitigate the effect by distributing the expense across numerous shipments. However, industries dealing in lower-margin goods—such as fresh produce exporters—fear they will have no choice but to pass increased costs onto consumers.

“The proposed tax is an adjustable figure that will ultimately be passed down to customers,” said Moritz Fuhrmann, co-CEO of MPC Container Ships ASA, during a maritime panel in Singapore this week.

With final proposals expected in April, shipowners and logistics operators are bracing for potential financial fallout—and seeking ways to navigate the evolving regulatory landscape.