Why It Matters

China's dominance of global maritime infrastructure has triggered a trade dispute that could reshape U.S. shipping costs and supply chains. A Congressional Research Service report on Section 301 and China's shipping and shipbuilding sectors, updated Aug. 26, shows how Beijing's industrial strategy has created vulnerabilities for American commerce. In 2024, ships carried $2.2 trillion of U.S. global goods trade by value, representing 42.4% of all U.S. trade. That dependence on maritime transport runs through a global industry in which Chinese firms have significant market power, supported by an estimated $132 billion in state subsidies between 2010 and 2018.

The U.S. Trade Representative responded with port fees on certain vessels and tariffs on Chinese ship-to-shore cranes and other cargo-handling equipment. But a November 2025 U.S.-China agreement led USTR to suspend those remedies for one year, leaving Congress and the administration to weigh how to address China's dominance while seeking to revitalize U.S. shipbuilding.

The Big Picture

The U.S. Trade Representative initiated a Section 301 investigation in April 2024 after five major labor unions petitioned for action against Chinese practices in the maritime, logistics and shipbuilding sectors. USTR determined in January 2025 that China's targeting of those sectors for dominance was "unreasonable" and burdened or restricted U.S. commerce. PRC industrial plans set production, domestic content and market-share targets, while subsidies and state financing helped advance China's global role in shipbuilding, shipping, logistics and port operations.

Chinese shipbuilders held approximately 71% of global ship orders by gross tonnage in 2025, up from 57% in 2023. China produces 95% of global shipping containers, 86% of intermodal chassis and more than 70% of ship-to-shore cranes. State-owned or state-controlled PRC firms own or operate terminals at 96 overseas ports. By contrast, U.S. industry represents only 1.9% of world fleet ownership by capacity and 0.04% of global shipbuilding tonnage.

USTR's response included fees on certain Chinese-owned or operated vessels and Chinese-built vessels, along with tariffs on ship-to-shore cranes and other cargo-handling equipment. China retaliated with special port fees on certain U.S.-linked vessels.

The United States subsequently suspended its Section 301 actions for one year beginning Nov. 10, 2025, following a trade and economic agreement between President Donald Trump and Chinese President Xi Jinping. The suspension runs through Nov. 9, with the relevant tariff provisions scheduled to resume Nov. 10 absent another policy change.

The Bottom Line

Congress is considering legislation to revitalize the U.S.-flag shipping and shipbuilding industries, including H.R. 3151 and S. 1541, the bipartisan SHIPS for America Act, H.R. 2125, the Save Our Shipyards Act, and S. 1536, the Building Ships in America Act.

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