US Ag Exports 'Would End' if Fees Imposed on Chinese Ships

March 25, 2025

While crediting the Trump administration for effort, agricultural groups are sounding alarm over the Trump administration's proposal to charge $1 million or more in fees on Chinese ship companies or Chinese-built vessels.

Agricultural groups called on the U.S. Trade Representative to reconsider placing dock fees on ships from China.

The Office of the U.S. Trade Representative was expected to hear from more than 60 witnesses on Monday and Wednesday at a hearing over Section 301 Proposed Actions against China on maritime, logistics and shipbuilding sectors.

In an effort to rebuild the U.S. shipbuilding industry, the Trump administration has proposed charging ships with Chinese connections as much as $1.5 million when they dock in the United States for each port call.

The fees are part of a Trump administration effort to revive shipbuilding in the United States, but it would take years of work to build more U.S. ships. Grain exporters noted there are only 14 U.S.-flagged bulk ships for moving corn, soybeans or other commodities.

The National Corn Growers Association (NCGA) on Monday called for the Trump administration to exempt bulk shipments of farm commodities from the docking fees.

"Corn farmers are currently facing numerous challenges in the farm economy, including rising input costs, volatility in commodity prices, and stagnant market access opportunities," said Illinois farmer Kenneth Hartman Jr., president of NCGA. "Adding further financial strain through higher transportation costs could result in more instability for our members, particularly those who depend on global export markets to remain competitive."

The only person directly tied to agricultural groups who testified Monday before USTR was Indiana farmer Mike Koehne, a director for the American Soybean Association (ASA).

"With its inland waterways, rail, and roadways, I believe our transportation system is our competitive edge," Koehne said. ASA supports the goal of increasing domestic shipbuilding capacity to aid in the export of U.S. agriculture. However, the proposed solution offered by USTR in this investigation creates unintended consequences for soybean farmers like me. We have already seen negative impacts on the futures prices for soybeans because of market reactions to this proposal," Koehne explained in verbal testimony.

In written comments, ASA cited more than 50% of domestic soybean production is exported. The U.S. doesn't have the capacity to export beans at the rate proposed by the USTR.

"We are extremely concerned that if this proposal goes into effect, U.S. soybeans will be effectively shut out of our global export markets," ASA stated.

"While ASA understands the rationale behind this proposal, and our farm leaders are supportive of increased domestic shipbuilding capacity, our industry is reliant upon ocean-going vessels to export our crop to customers around the world in a cost-effective and efficient manner."

Growth Energy also submitted comments urging USTR to change course and reconsider the potential fees. Biofuels would also lose export competitiveness if the proposed fees went into effect, the group said. Just the talk of docking fees has impacted export commitments, the group stated.

"Some of our members are already experiencing reluctance from shippers to enter future transactions without shouldering the risk associated with this proposal," Growth Energy stated in its comments. "At the same time, other countries are taking actions to ease the cost of trade and expand their ethanol exports--most notably, Brazil is currently seeking a trade agreement with the European Union (EU) that would give their ethanol industry greater, easier access to that market."

The National Council of Farmer Cooperatives (NCFC) credited the Trump administration for looking at building more U.S. ships but pointed out the risks in slapping large fees on Chinese ships. NCFC urged the U.S. Trade Representative and policymakers to consider the unintended consequences on agricultural exports.

"While the intent to rejuvenate the U.S. shipbuilding industry is commendable, the immediate ramifications of such fees could harm American agriculture," said Chuck Conner, president and CEO of NCFC. "A substantial portion of our agricultural exports relies on international maritime transport, with many products shipped aboard Chinese-built vessels due to their prevalence in the global fleet. Imposing hefty fees on these ships will lead to increased transportation costs passed down to U.S. exporters, thereby diminishing the competitiveness of American agricultural products in global markets."

The Agriculture Transportation Coalition stated the proposed Section 301 rule "would end" U.S. agriculture and forest products being exported. "Our foreign customers do not need to buy from us; they can and already have shifted sourcing to other countries." Increasing transportation fees would accelerate those challenges.

The Agriculture Transportation Coalition cited Brazil has already taken significant market share from the U.S. in soybeans, cotton, beef and lumber. Shipping commodities through U.S.-flagged ships is not affordable "and, under every analysis, will not be in the future. Not even close," the coalition stated.

The coalition pointed out more than 20% of U.S. farm income depends on exports, "meaning even minor cost increases resonate sharply across farm country."

The North American Export Grain Association (NAEGA) commended the Trump administration for pursuing policies that eliminate disadvantages for American businesses and producers. Still, NAEGA President and CEO Alejandra Castillo cited some challenges ahead.

NAEGA noted Chinese dominance in shipbuilding and logistics, citing that 48% of current bulk vessels for agricultural exports are Chinese built. This control has "restricted choice for grain and oilseed exporters who have little choice but to use Chinese-built or Chinese-flagged vessels to remain competitive and create demand for the abundant commodities produced by America's farmers."

Currently, there are fewer than 14 available U.S. bulk vessels globally for moving grain and oilseed commodities.

Each $1 million increase in ocean freight costs adds 40-50 cents a bushel in costs for a Panamax-sized ship and $1.20 per bushel for smaller, laker vessels.

It's unclear when the International Trade Commission will set a rule on ships and fees, but as DTN's Basis Analyst Mary Kennedy cited last week, "an implementation of some or all proposed measure in April cannot be ruled out."

Source: DTN