Hiked U.S. Port Fees On China-Built Ships Choke Coal, Agriculture Exports

President Donald Trump's plan to revive US shipbuilding by imposing massive fees on China-linked ship visits to American ports is causing US coal inventories to swell and increasing uncertainty in the embattled agriculture market.

Enacting and implementing these fees could halt US coal exports within 60 days, putting $130 billion worth of shipments at risk.

Exporters are struggling to find ships to send goods abroad, Lisa Baertlein, Karl Plume, Tom Polansek, and Timothy Gardner reported for Reuters.

Trump is drafting an executive order that would fund a US Trade Representative (USTR) proposal to levy fines of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China.

These potential port fees have limited the availability of ships needed to transport agricultural products, energy, mining materials, construction materials, and manufactured goods to international buyers, according to major US exporters and transportation providers.

This concern has been expressed in interviews with Reuters, letters to US officials, and comments ahead of USTR hearings next week.

The proposed fees could also make it harder for the US to export other energy products such as oil, liquefied natural gas, and refined fuels, the American Petroleum Institute (API) stated.

The USTR proposal aims to shift US exports to ships that are both flagged and built in the US. However, the current fleet of US-flagged cargo vessels is fewer than 200, and not all of them were built in the US.

"Very few maritime operators will be able to document that their annual share of US exports meets the required 20% carried on US-built, US-flagged vessels," shipping association BIMCO stated in USTR comments dated March 17.

Enacting and implementing these fees could halt US coal exports within 60 days, putting $130 billion worth of shipments at risk, Thrasher said.

He added that the fee structure could increase the delivered cost of US coal by up to 35%, making it uncompetitive in the global market.

“The loss of direct and indirect jobs would be catastrophic,” Thrasher warned, confirming that he had sent a letter expressing these concerns but had not yet received a response.

Coal mines in West Virginia are also preparing to lay off miners as unsold coal inventories continue to pile up, Chris Hamilton, CEO of the West Virginia Coal Association, told Reuters.