Navigating China’s new tonnage tariffs on US-related shipments

NNews of China’s recent retaliatory tonnage tariffs on US-linked vessels has spread across shipping markets quickly, marking a significant step in the further escalation of ongoing trade tensions between the US and China.

The previous article summarized the report of the International Chamber of Shipping Liaison office (China) on this issue. This article highlights some of the issues that have arisen as a result of these developments.

What we know so far
On October 14, 2025, the General Office of the Ministry of Transportation in the PRC issued “Measures for Implementing Special Port Fee Collection for US Ships”. It confirms that ships with US connections calling at Chinese ports must pay a “special port fee” calculated per net ton. These fees are payable for calls at Chinese ports from October 14, 2025 onwards and will increase annually through 2028. Officially introduced as a reciprocal response to US port fees on Chinese vessels, these new levies will likely have real commercial and legal impacts for those involved in Sino-American trade.

Which ship was captured?
There are two classes of blood vessels affected:

‘Pure’ US vessels: vessels owned or operated by US citizens or US-registered entities; ships built in the US; or vessels flying the US flag; And
US-related vessels: cases in which a US citizen or US entity directly or indirectly holds 25% or more of the voting rights or board seats in the entity that owns or operates the vessel.
This second category is of particular interest to shipping players as it tends to include standard financing arrangements (JV, sale-and-leaseback structures) and vessel charter agreements, and influences the risk, profitability and compliance profile of such agreements. This immediately impacts those with current or prospective relationships with US capital markets.

Which ships/calls are excluded?
Special port charges do not apply to Chinese-built vessels or ballast vessels in Chinese shipyards. If the ship calls at a series of Chinese ports, special port charges only apply to the first visit, and will not be charged more than five times in the same 12-month period starting from 17 April 2025.

How do Chinese authorities know if my ship is sufficiently connected to the US?
Currently, ships wishing to stop at Chinese ports are asked to self-report. Information provided by or on behalf of the vessel will be checked by Chinese authorities, who may request additional information if they suspect that the information is incomplete or correct.

Owners/operators/financiers must be very careful about incorrect information appearing on ship intelligence databases, in which they have an interest. Hill Dickinson has requested intelligence databases to record incorrect information that is detrimental to clients’ interests. Failure to pay “special port fees” means entry/exit formalities will not be processed, thereby causing severe operational/cash flow disruptions.

Is the charterer not responsible for port charges?
Under the time charterparty, port costs are usually borne by the charterer. However, the allocation of risk to each contract depends on its wording. A contract may contain provisions for charges that are more similar in nature to “special port charges” than to standard port charges.

These port fees make my contract completely unprofitable. Can I get out of the contract?

While these new levies can have a major impact on profitability, changes to the regulatory landscape that make a contract unprofitable are not enough to allow affected parties to walk away from the contract.

Stakeholders must learn from difficult times so that their contracts can “future-proof” against trade war measures: war risk/sanctions/force majeure clauses can be adapted to trade war measures, material economic hardship clauses can provide a way out of bad deals, and even renegotiation clauses can produce commercially viable solutions. This becomes more important for borrowers, as changes in profitability profiles may have a direct impact on their debt repayments.

Should I retag/restructure?
Chinese authorities have signaled that beneficial ownership and control tests will be applied, making the move both legal and reputational risk if not carefully planned and properly implemented. Initial assessments indicate that many publicly traded shipping companies, particularly those listed on US exchanges, may exceed the US beneficial ownership threshold of 25%, even if they are incorporated in other countries and operationally headquartered outside the US.

My ship has ties to the US but is not currently covered by “special port fees”. Why should I care?
Volatility has been a thing for some time. Sources indicate that Chinese authorities may consider extending the measure to charter parties. Likewise, there is no guarantee that the threshold for establishing relations with the US will not be lowered (especially with the existing threat of escalation).

So, what should I do?
Review your actual and perceived company structure: Review the shareholding structure (especially for listed entities) down to individual UBOs. Make sure the information about your ship in the shipping intelligence database is correct, bearing in mind that some of these databases provide information about beneficial owners that is not necessarily accurate.
Future plans: Initiate contingency planning for compliance and documentation, particularly regarding shareholder lists and voting rights disclosures. Review existing contractual arrangements in their entirety and assess potential exposures.
Plan for uncertainty: Introduce provisions regarding who is responsible for charges imposed when the charges are disputed, and ensure enforcement of the law through appropriate independent resolution efforts.
Future-proof existing contracts: Seek to introduce provisions to protect long-term commitments from adverse regulatory changes. It is always more difficult to renegotiate with business partners/financiers when under pressure.
Customize: Use familiar clauses and adjust the language to cover trade war risks. Review your standard wording for gaps. Consider whether any corrective action is required to ensure that your company/business structure remains compliant.
Stay abreast of the situation: Monitor regulatory updates for guidance. Note newly published standard clauses (e.g. BIMCO USTR Clause for 2025 Time Charter Parties, Intertanko US China Nexus Fees Clause for term charters, Intertanko Liability Clause for US China Nexus).
Ask the right questions: Check with your counterparty before signing a contract and turn their responses into contractual obligations.
Ask the right people: Liaise with your legal advisor for up-to-date information and prompt/proactive action. Seek input from local practitioners.
Source: Hill Dickinson (https://www.hilldickinson.com/insights/articles/navigating-chinas-new-tonnage-tariffs-us-linked-shipping-new-cost-wave-uschina)