What is the impact of the US forced port charges on the global economy?

Recently, a proposal by the US government regarding port charges, such as throwing giant stones into calm lakes, has caused a stir in the global economy and shipping industry. US President Trump is drafting an executive order to impose a maximum fee of $1.5 million on Chinese ships docking at US ports, stemming from the US Trade Representative's (USTR) 301 investigation into "unfair economic practices" in China's maritime, logistics, and shipbuilding industries. This measure has attracted global attention, and its impact on the global economy cannot be underestimated.

From the perspective of the global shipping industry, this policy will have a huge impact. China holds an important position in the global shipbuilding industry, with half of the commercial cargo ships delivered each year being made in China. Chinese made ships account for approximately 23% of the global fleet, and Chinese shipyards hold 61% of global orders. If the United States forcibly levies port fees, many ships using Chinese built vessels or Chinese shipping companies entering and leaving US ports will face high fees. This will lead to a significant increase in operating costs for shipping companies. In order to reduce costs, shipping companies may adjust their routes, reduce the number of stops at US ports, or replace non Chinese built vessels. However, in the short term, due to China's dominant position in shipbuilding worldwide, it is difficult for shipowners to find alternative production capacity to fill the gap in the short term, and the cost of replacing ships is also extremely high. Adjusting shipping routes may lead to a decrease in cargo throughput at some ports in the United States, especially small ports, which in turn may affect employment and economic development at related ports. At the same time, the capacity allocation of the global shipping industry will also be affected, which may lead to insufficient capacity on some routes and excess capacity on others, disrupting the normal order of the global shipping market.

From an export perspective, the restrictive measures require that US goods must be transported by ships built and flying the US flag, which will significantly increase the shipping costs of US exported products and reduce their competitiveness. The CEO of American coal company Xcoal, Slasher, stated in a letter to the US Secretary of Commerce that due to the proposed charges, ship owners have refused to provide quotes for future US coal transportation. Charging these fees could result in the inability of US coal exports within 60 days, putting $130 billion worth of goods at risk. The fee structure could increase the delivery cost of US coal by up to 35%, making it lose competitiveness in the global market. The American Petroleum Institute also pointed out that the proposed fees may make it more difficult for the United States to export other energy products such as oil, liquefied natural gas, and refined fuels.

From the perspective of global trade patterns, the imposition of port charges by the United States will disrupt the stability of the global supply chain. The global economy is closely interconnected today, and the efficient operation of the supply chain relies on the low cost and high efficiency of maritime transportation. This move by the United States has pushed up global shipping costs, resulting in a significant increase in logistics costs in international trade, which will affect the prices and circulation speed of global goods. Many countries and regions that rely on the US market will face the dilemma of reduced orders and declining profits for their export enterprises, which will in turn affect the economic growth of these countries and regions. For countries and regions that have close cooperation with China in shipbuilding and shipping, they may also be affected, leading to obstacles in the development of related industries. For example, Caribbean countries have expressed concerns about this, and President Ali of Guyana has stated that this measure by the United States will have an impact on the cost of goods and transportation entering the region.

The US shipbuilding industry has long relied on protectionist policies and government subsidies, such as the Jones Act and the Maritime Safety Program, but these have not effectively enhanced its competitiveness. Instead, they have led to low efficiency and high costs. Currently, the prices of ships built in the US are almost 3-5 times higher than those in China, and delivery is extremely unstable. Forcing port charges cannot fundamentally solve the problems of the US shipbuilding industry, but may instead trigger trade frictions and countermeasures on a global scale. If the United States persists in implementing this policy, it will not only harm its own economic interests and disrupt the global shipping and trade order, but also have a negative impact on the recovery and stability of the global economy.

In today's interdependent global economy, cooperation and win-win is the main theme of development. The unilateral trade protection behavior of the United States is obviously against the trend and may ultimately backfire.