Who Pays for Chinese-Built Tonnage? USTR Port Fees, the BIMCO Clauses, and a Suspension Ending in November

On 10 November 2025, the United States and China each suspended the port fee regimes they had imposed on one another's shipping. The suspension runs twelve months. It expires on 10 November 2026, which is roughly five weeks from now, and there is no guarantee it will be renewed.

Most charter parties fixed since then have been written as though the fees do not exist, because at the moment of fixing they did not. If the measures resume, those contracts will be silent on a charge that Alphaliner calculated at approximately $3.2 billion across the ten largest container carriers for 2026 alone, and the question of who pays will be answered by whoever has the better argument rather than by the agreement.

BIMCO published standard clauses for both regimes, in July and November 2025. This article covers what the fees actually are, how the clauses allocate them, where the cost ends up, and whether any of it will do what it was designed to do.

The USTR Fee Structure

The Office of the US Trade Representative published its notice on 17 April 2025 following a Section 301 investigation into China's targeting of the maritime, logistics, and shipbuilding sectors. The measures took effect on 14 October 2025 and represent a scaled-back version of the original proposals, which had contemplated fees of up to $1.5 million per call.

The notice imposes service fees through two annexes, and the distinction between them drives everything that follows.

Annex I applies to vessel operators of China, meaning vessels owned or operated by a Chinese entity. The fee is a flat charge per net ton, per voyage. Reporting on the measures as implemented describes a rate of $50 per net ton from 14 October 2025, rising by $30 per net ton annually, which puts the 2026 rate at $80 per net ton. Alphaliner used $80 in its 2026 modeling.

Annex II applies to operators of Chinese-built vessels who are not themselves Chinese. The fee is the higher of $23 per net ton or $154 per TEU of capacity.

Two features apply to both. The fee is capped at five charges per vessel per year, and the two annexes are not cumulative, so a vessel falling within both pays under one rather than both.

The practical consequence of that structure is that a Chinese-owned vessel pays substantially more than a Chinese-built vessel operated by someone else. On a large containership, Annex I can run to several million dollars a year at the cap, while Annex II on the same hull under non-Chinese operation produces a materially lower figure.

Rates escalate annually under the published schedule, and the figures above come from secondary reporting rather than from the notice itself. Anyone pricing exposure should work from the USTR notice directly.

The Chinese Countermeasure

The PRC Ministry of Transport issued Announcement No. 54 [2025] on 10 October 2025, imposing Special Port Fees on vessels with a nexus to the United States calling at Chinese ports. The fees took effect on 14 October 2025, the same day as the US measures.

Scope is the mirror image. The fee applies to vessels that are US-built, US-flagged, or owned or operated by U.S. entities, subject to exceptions. China-built vessels are exempt, as are empty ships entering Chinese yards solely for repairs.

The fee is calculated per voyage on net tonnage, reported at around $56 per net ton from 14 October 2025 and rising to around $157 by 2028, and is likewise capped at five charges per vessel per year. The Announcement sets the amounts in renminbi, so dollar figures move with the exchange rate.

Note the structural difference. The U.S. regime has two fee categories. The Chinese regime has one.

What That Costs in Practice

Alphaliner modeled the exposure across the ten largest container carriers on a worst-case basis, assuming current deployments are maintained and the program proceeds as planned. The total came to approximately $3.2 billion for 2026.

The distribution is the instructive part.

COSCO Group carries more than half of it, at roughly $1.53 billion, because it falls under Annex I as a Chinese operator. ZIM is next at around $510 million, followed by ONE at around $363 million and CMA CGM at around $335 million. Alphaliner attributes the exposure of those three to their heavy use of tonnage chartered from Chinese owners, which pulls them into the Annex I category rather than the lower Annex II one.

At the other end, Maersk's fleet would face roughly $17.5 million and Hapag-Lloyd around $105 million, with Hapag-Lloyd's figure driven mainly by Chinese-owned units in its fleet. Yang Ming's exposure was put at around $48 million. Alphaliner concluded that Evergreen and HMM would avoid the fees entirely, with HMM operating a fleet that is 23 of 25 units Korean-built.

One number stands outside the carrier list and says the most about how the measure actually works. Seaspan, a Hong Kong-headquartered tonnage provider with 54 ships of around 0.62 million TEU chartered into U.S. trades, was calculated to generate approximately $1.31 billion in fees across the various lines operating its vessels under charter. Seaspan has reportedly responded by relocating its headquarters to Singapore.

That is the measure working as a tax on corporate domicile rather than on where ships are built, and it was the first behavioral response the market produced.

Why Charter Parties Could Not Handle This

A time charter allocates costs by category. Owners carry the vessel, crew, insurance, and maintenance. Charterers carry bunkers, port charges, and the commercial consequences of their own trading orders.

A port fee triggered by the nationality of the owner, the flag of the vessel, or the country where the hull was built does not sit cleanly in either column. It is incurred because the charterer sent the ship somewhere, which points to the charterer. It is incurred because of a characteristic of the vessel the charterer did not choose, which points to the owner.

The Seaspan figure shows why this mattered so urgently. A chartered-in vessel generates a fee determined by the owner's identity, payable in connection with a voyage the charterer ordered. Where the contract is silent, both arguments are available, and the risk of dispute rises sharply where contracts say nothing about regulatory changes of this kind.

How the BIMCO USTR Clause Allocates

BIMCO's Documentary Committee adopted the USTR Clause for Time Charter Parties 2025 on 22 July 2025, following a process involving owners, charterers, P&I clubs, and other stakeholders.

The default allocation follows normal time charter practice. Charterers are responsible for U.S. service fees where the vessel calls at a U.S. port on their orders. Charterers pay the fee directly to the relevant U.S. authority and indemnify owners where it becomes payable because of their trading orders.

Three provisions do the real work.

The Declaration Obligation: Owners must declare in writing, if requested by charterers, whether the vessel has the ownership or operational nexus to China that triggers Annex I, and whether the vessel was built in China. Owners must then notify charterers as soon as reasonably practicable of any change or correction to those declarations at any time during the charter.

This is the heart of the clause. A charterer cannot establish from the outside whether a vessel's ownership chain creates a Chinese nexus, and the owner can. The clause puts the disclosure obligation where the knowledge sits and makes it continuing rather than a one-off statement at fixture.

The Uplift Provision: Where charterers reasonably expect an Annex II fee but Annex I applies instead, owners are liable for the difference.

Given the gap between the two rates, that provision is doing serious work. A charterer who priced a voyage on an Annex II assumption and finds Annex I applies is looking at a multiple of the expected cost, and the clause places the excess on the party whose ownership position produced it.

Failure to Disclose: Owners remain liable where a fee is triggered by a failure to provide the required information.

The clause also addresses payment mechanics. Owners may suspend performance where charterers fail to pay as required, and owners who pay the fee on charterers' behalf are entitled to reimbursement in defined circumstances.

How the Chinese Clause Differs

BIMCO published the Chinese Special Port Fee Clause for Time Charter Parties 2025 in November 2025, after the fees had already been suspended. The clause mirrors the USTR structure and adapts it.

The declaration runs the other way. Owners must declare whether any entities associated with the vessel have a nexus to the United States, or whether the vessel was built in the United States, and must notify charterers of changes during the charter period. BIMCO's explanatory material notes the drafting was intended to deliver transparency without requiring disclosure of sensitive organizational details.

Because the Chinese measure imposes a single fee category, the contractual framework is simpler. There is no equivalent of the Annex I and Annex II uplift, and no provisions addressing fee increases were needed.

One limitation is stated frankly by BIMCO. Certain ambiguities in the PRC MOT Announcement, including the undefined term operator, cannot be resolved within the clause. The clause allocates responsibility for a fee whose scope remains partly uncertain, which means a dispute about whether the fee applies at all is a different question from a dispute about who pays it.

The Problem for Intermediate Charterers

This is the exposure most likely to be overlooked and it is worth stating plainly.

A disponent owner sitting in the middle of a charter chain has two contracts. One with the head owner above and one with the sub-charterer below. If the clause appears in one and not the other, or appears in different forms, the party in the middle could end up absorbing the fee.

The guidance from practitioners is unambiguous. Fee allocation provisions, together with the related time bars and indemnities, need to be strictly back to back throughout the chain.

That is a contract management problem rather than a drafting problem. The clause exists and it works. What does not work is incorporating it into the charter you negotiated last and not the one you negotiated first.

The Gap Nobody Has Filled

Both BIMCO clauses are drafted for time charter parties. Neither addresses voyage charters.

Under a voyage charter the owner bears port charges as a matter of ordinary allocation, which suggests a different default and a different negotiation. Parties fixing voyage business with exposure to either regime need bespoke wording, and the BIMCO clauses are a drafting reference rather than a solution that can be dropped in.

How Much of the Fleet Is Actually Exposed

The clause question is contractual. The scale question is structural, and the numbers explain why this measure matters more than its size suggests.

Chinese yards now dominate construction to a degree that has no modern precedent. In the first half of 2026, Chinese shipbuilders took 1,131 of the 1,481 vessels ordered worldwide, around 72 percent of the market by compensated gross tonnage. China led global new orders in 15 of the 18 main ship categories as of the first quarter, with market share above 90 percent in very large crude carriers, car carriers, bulk carriers, and container ships above 10,000 TEU. Ministry data puts Chinese market share above 80 percent in dry bulk, container ships, and crude tankers.

South Korea took around 195 vessels in the same period, roughly a fifth of the market. Japanese contracting fell 83 percent year on year in the first quarter of 2026, to around 1 percent of new orders, the lowest share recorded since at least 1996.

Now set that against the fleet already afloat. Of the current container ship fleet, 50.1 percent of capacity was built in Korea and 29.4 percent in China. Of the record orderbook of more than 10 million TEU, Chinese yards hold 7.36 million TEU, a 73.7 percent share.

That contrast is the point. Annex II exposure in the container trades today sits below 30 percent of capacity. On the current orderbook it approaches three quarters. Every year the measure stays in place, the share of the world fleet that triggers it grows, and it grows regardless of what anyone does about it.

Where the Cost Ends Up

The cascade is straightforward and it ends where these things usually end.

The BIMCO clause puts the fee on the charterer, because the charterer ordered the port call. For a liner operator the charterer is frequently an affiliate of the carrier, so the cost sits on the service. Carriers then recover it the way they recover every other port cost, through a surcharge. We have already seen peak season surcharges, war risk surcharges, canal surcharges, and emergency conflict surcharges introduced across the past two years, and a port fee surcharge is a line item away.

From there it moves to the beneficial cargo owner, and from the cargo owner into landed cost. The effect is a tax on importing through U.S. ports, paid by the importer, embedded in the price of the goods.

For bulk and tanker trades there is no surcharge mechanism, so the cost shows up in the freight rate. A Chinese-built bulker calling at a U.S. Gulf port carries a cost that a Korean-built sister does not, and the charterer will discount the vessel accordingly. The practical consequence is a two-tier market in which build location affects employability on US-facing trade.

That is a genuinely new variable. The yard that built a ship twenty years ago has never previously determined what it costs to call somewhere.

Will It Build Ships in America

The stated purpose of the Section 301 action is to reverse Chinese dominance and restore American shipbuilding. Whether the fees can do that depends on there being somewhere else to go. Currently there is not anything close to the required scale.

The U.S. commercial orderbook has been reported at around 52 units totaling roughly 245,000 gross tons, consisting primarily of tugboats and passenger and cruise vessels. The contrast most often cited is that China builds more than 1,700 ships a year while the U.S. builds fewer than five. Of the entire global container ship orderbook, three vessels are on order at U.S. yards, and Alphaliner attributes those to Jones Act requirements for domestic trades to Hawaii, Alaska, and Puerto Rico rather than to the fee regime.

The alternatives are also constrained. BIMCO has noted that South Korea and Japan, the second and third largest shipbuilding nations, face significant challenges expanding production. Korean capacity is concentrated in higher value segments and holds about two thirds of the LNG carrier orderbook. Japanese output has collapsed to a rounding error on new orders.

There is some evidence the fees moved behavior briefly. China's share of global contracting fell from 72 percent in the first half of 2024 to 52 percent in the first half of 2025, and BIMCO's analysis attributed that principally to a broader slowdown in contracting and a shift in vessel types, with concerns about USTR port fees contributing to a lesser extent.

By the first half of 2026 the Chinese share was back around 72 percent.

What did change was corporate structure. Seaspan moved its headquarters out of Hong Kong. Carriers began reshuffling deployments to put non-Chinese tonnage on U.S. services and Chinese tonnage elsewhere. Both responses reduce fee exposure without building a single additional ship in an American yard.

The honest reading is that a fee changes where you would rather build and does not change where you can build. Government-led capacity programs are underway in the United States and India, and capacity of the kind required takes a decade and sustained industrial investment rather than a tariff. In the meantime the measure functions as a cost on trade and an incentive to redomicile, with the party ultimately paying being the U.S. importer.

That is not an argument that the policy is wrong. Industrial policy frequently costs something before it produces anything. It is an argument that operators should plan for the cost rather than for the behavioral change, because the cost is the part that arrives on schedule.

What to Do Before 10 November

Establish which annex applies to each vessel. Chinese ownership or operation triggers Annex I at the higher rate. Chinese build with non-Chinese operation triggers Annex II. For the Chinese fee, U.S. nexus means US-built, US-flagged, or US-owned or operated. Many operators assume they are clear without having traced the ownership chain.

Incorporate the clauses into existing charters, not only new ones. Both are drafted for use in existing agreements. A charter running into 2027 was probably fixed during the suspension and is probably silent.

Audit the chain. For every contract where you sit in the middle, confirm the clause is present on both sides and in the same form, including the time bars and indemnity provisions.

Set up the declaration process now. The owner's obligation is continuing. A change in ownership, management, or operator during the charter triggers a notification duty, and the consequence of missing it is liability for the fee.

Model the five-call cap. Because the charge is capped at five voyages per vessel per year, the exposure on a vessel in regular U.S. service is predictable and can be budgeted. The exposure on a vessel making occasional calls is not the same calculation.

Draft bespoke terms for voyage business.

Factor build location and ownership into acquisition decisions. For tonnage intended for US-facing trade, the yard of origin and the domicile of the owner now carry a recurring cost and an effect on employability. Both belong in the valuation.

Do not treat the suspension as a resolution. The measures were suspended as part of a bilateral arrangement, the suspension can be lifted at any time, and current P&I guidance remains that in most cases it is prudent to include bespoke terms allocating responsibility for both regimes regardless.

The Bottom Line

The U.S. and China imposed port fees on one another's shipping, the industry discovered that standard charter party forms had no answer for a charge triggered by ownership and build, and BIMCO produced clauses for both within months.

The fees were then suspended, and the urgency went out of it.

The suspension expires on 10 November 2026, assuming another extension isn't granted before then. A charter fixed on silent terms and running past that date carries an unallocated cost that, on Alphaliner's modeling, reaches $1.53 billion for a single carrier and $1.31 billion across the vessels of a single tonnage provider. The party most likely to absorb it is whoever sits in the middle of the chain with the clause on one side and nothing on the other.

The wider effect is slower and more certain. Three quarters of the world's newbuilding capacity sits in Chinese yards, there is no alternative at scale, and the share of the fleet that triggers the fee rises every year. The cost will be allocated by contract, recovered by surcharge, and paid at the end of the chain, which is where trade measures usually arrive.

Incorporating a published standard clause into an existing charter is a short conversation. Arguing about who pays after the fee has been assessed is not.