USTR Issues Modification Of Section 301 Action

On Oct. 10, the United States Trade Representative (USTR) announced modifications to its Section 301 Action related to China's Targeting of Maritime, Logistics, and Shipbuilding Sectors for Dominance. These modifications are the result of comments received by USTR in response to its Federal Register notice dated June 12, 90 Fed. Reg. 24856. The four key changes announced by USTR are as follows:

1. The basis of the service fee on foreign-built vehicle carriers (including Roll-On/Roll-Off Vessels) was changed from car equivalent units (CEUs) to a fee based on the net tonnage of the vessel. Effective Oct. 14, the service fee will be $46 per net ton. The collection of this fee is limited to five times per calendar year per vessel. Previously, USTR had proposed a fee of $150 per CEU.
2. USTR exempted the operators of vessels that are enrolled in the Maritime Security Program (MSP) through April 18, 2029, including any U.S. flag vessels built in China that are enrolled in the MSP. USTR "[d]etermined that it is appropriate to provide targeted coverage to operators of Maritime Security Program vessels to maintain incentives for maximal use of the U.S. flag and to ensure availability of such vessels for national security purposes, as well as to operators of U.S. Government vessels."
3. In order to avoid short-term disruptions to the liquefied natural gas (LNG) sector and promote investment in U.S. shipbuilding capacity, USTR decided not to exercise its authority to suspend licenses for LNG shipments. "USTR views LNG exports as an important contribution to the U.S. economy and U.S. economic security. USTR observes that significant domestic demand for new LNG vessels coupled with increased investment in U.S. shipbuilding capacity will result in the successful construction of LNG vessels in the United States in the coming years, ensuring that U.S. energy exports can be transported on U.S.-built vessels."
4. USTR determined that duties of 100% are to be assessed on ship-to-shore (STS) cranes that are manufactured, assembled, or made using parts of Chinese origin. USTR noted that several comments were generally supportive of tariffs on STS cranes. "Increasing Section 301 duties on STS cranes will reduce exposure to and dependence on Chinese sources, strengthen U.S. supply chain resilience and economic security, and provide additional leverage with China to eliminate the investigated acts, policies, and practices." This duty will not be applied to STS cranes that fulfill contracts executed prior to April 17, 2025 and enter the United States prior to April 18, 2027.

Finally, USTR will continue to monitor the actions taken as part of its investigation and may make future modifications "[b]ased on a range of considerations, including vessel availability, economic impacts, international impacts, and economic security, among others."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.