The world’s two largest economies, the United States and China, have opened a new front in their trade confrontation — this time on the high seas. Beginning October 14, 2025, both nations simultaneously imposed reciprocal port fees on each other’s vessels, a move that could reshape global shipping routes, raise freight costs, and inject fresh volatility into global supply chains.

The dueling fees mark a sharp escalation in the ongoing economic rivalry between Washington and Beijing, turning international shipping — once a neutral conduit of global commerce — into a new battleground for geopolitical leverage.

China’s Ministry of Transport announced new special port charges targeting ships that are U.S.-owned, operated, flagged, or built. Chinese-built vessels, however, are exempt from the levies — a move seen as protecting the country’s domestic shipbuilding industry while punishing U.S. maritime interests.

Under the new rules, fees are applied at the first Chinese port of entry or across the first five voyages of a ship within a single year. The billing cycle begins every April 17. Empty vessels entering Chinese shipyards for maintenance or repair will not be charged, according to officials.

Beijing has described the policy as a countermeasure to U.S. “discriminatory” maritime policies, asserting it is designed to safeguard China’s shipping and logistics competitiveness amid mounting U.S. restrictions.

The United States has implemented its own port surcharges on ships connected to China — including those owned, operated, or flagged under Chinese control. The White House argues the new fees are necessary to reduce Beijing’s dominance in global shipping and boost America’s struggling shipbuilding sector.

Analysts estimate that the U.S. measures could add $3.2 billion in costs to the shipping industry in 2026, with Chinese state-run carrier COSCO Shipping expected to bear nearly half of that total. Some U.S. exemptions have been introduced for long-term charters of LNG and ethane carriers, delaying the full financial impact until the end of this year.

These moves stem from a U.S. investigation launched during the Biden administration, which concluded that China used unfair subsidies and practices to dominate global shipbuilding and logistics markets. The findings paved the way for President Donald Trump’s administration to authorize the new maritime fees earlier this year.

The new levies are already rippling across global supply chains. Industry experts estimate that around 11% of the world’s container ships and 13% of crude oil tankers could fall within China’s fee scope. Many of these vessels serve crucial trade routes linking Asia, North America, and Europe.

Shipping analysts warn that the tit-for-tat maritime taxes will distort freight flows and increase operating costs for shipping firms. Carriers may reroute vessels through neutral ports or raise rates to offset the new fees, ultimately pushing up the cost of consumer goods, raw materials, and energy worldwide.

Oil and gas trades are expected to be particularly affected, as China remains one of the largest importers of crude oil and liquefied natural gas. Bulk commodity markets, including grain and metals, may also see disruptions as charterers shift to alternative ports to avoid penalties.

Despite the escalating tensions, shares in COSCO Shipping climbed more than 2% in Shanghai trading after the company announced plans to buy back up to 1.5 billion yuan ($210 million) worth of shares within three months. The move aims to stabilize the company’s valuation and reassure investors amid mounting U.S. trade headwinds.

Other carriers, such as oil tanker operator DHT Holdings, confirmed they are unaffected by the new fees, citing the absence of U.S. ownership ties in their fleets. Still, most global shipping companies are now reassessing their exposure to either U.S. or Chinese-linked ports.

One European shipbroker described the situation as “a spiral of maritime taxation” — warning that the mirroring fee systems could entrench a cycle of economic retaliation and complicate global logistics for years to come.

Beyond economics, the new port fees illustrate a profound geopolitical shift: shipping is no longer a neutral global service but a tool of national power.

U.S. officials have hinted at additional sanctions or port bans on nations that align with China in upcoming maritime environmental votes. Meanwhile, China has doubled down on supporting international efforts to curb greenhouse gas emissions from ocean shipping, highlighting the deep policy divide between the two powers.

By intertwining trade, environmental, and security agendas, both countries have effectively weaponized global shipping — transforming the seas into another arena for strategic competition.

China has accused the U.S. of breaching World Trade Organization (WTO) rules and violating the 2003 Sino–U.S. Maritime Agreement. Beijing’s Commerce Ministry urged Washington to reverse what it calls “illegal and protectionist” measures.

In a separate retaliation, China recently imposed sanctions on U.S.-linked subsidiaries of South Korea’s Hanwha Ocean, accusing them of cooperating with U.S. investigations into Chinese shipbuilding practices.

Legal experts expect both countries to face WTO challenges and potential disputes over maritime law and treaty obligations as the confrontation deepens.