US, China turn shipping lanes into next front of their trade war

The US–China trade war has officially hit the high seas. Both Washington and Beijing have started charging new port fees on ocean shipping firms that move everything from crude oil to Christmas toys, the latest tit-for-tat escalation between the world’s two largest economies.

The move follows weeks of rising tension after China expanded its export controls on rare earth minerals and US President Donald Trump threatened to impose 100% tariffs on Chinese goods starting November 1.

Now, both sides are targeting the shipping industry. Beijing confirmed it’s collecting special fees on US-owned, operated, built, or flagged vessels, though ships built in China are exempt. Empty vessels arriving for repairs are also spared, according to Chinese state broadcaster CCTV.

Washington introduced a similar measure earlier this year, aimed at weakening China’s dominance in global shipbuilding and logistics. The US fees are being collected at each vessel’s first port of entry, or for up to five voyages per year.

“This tit-for-tat symmetry locks both economies into a spiral of maritime taxation that risks distorting global freight flows,” said Xclusiv Shipbrokers, a Greek-based firm.

Independent shipping analyst Ed Finley-Richardson said the sudden disruption has left operators scrambling. “Everyone is quietly trying to improvise workarounds,” he told Reuters, adding that some US shipowners are reportedly trying to sell cargoes mid-voyage to divert their ships away from Chinese ports.

China’s Ministry of Commerce struck a defiant tone, saying:

“If the US chooses confrontation, China will see it through to the end; if it chooses dialogue, China’s door remains open.”

The financial hit could be heavy. Analysts expect China’s COSCO, one of the world’s biggest container carriers, to absorb nearly half of the estimated $3.2bn cost of the US port fees next year.

Meanwhile, Beijing also announced sanctions on five US-linked subsidiaries of South Korea’s Hanwha Ocean, accusing them of aiding Washington’s trade probe into Chinese practices. Hanwha’s shares dropped nearly 6% after the news.