USTR has proposed keeping its Section 301 fees on China linked vessels switched off until Jan. 9, 2027, pushing the maritime deadline past the Nov. 9 cliff. Comments close Oct. 30, and the product exclusions expiring the same week are not covered.
WASHINGTON, Oct. 25, 2026
The Office of the United States Trade Representative has moved to keep the most expensive unused tariff instrument in the American trade arsenal switched off for another two months, proposing to extend the suspension of Section 301 fees on China built and China linked vessels through Jan. 9, 2027.
The proposal, reported by gCaptain on Oct. 23 and carried in a Federal Register notice scheduled for publication on Oct. 26 under document number 2026-21755, would run the existing pause from Nov. 10, 2026 through Jan. 9, 2027. The current suspension expires at the end of Nov. 9. Comments are due by 5 p.m. Eastern on Oct. 30 through the USTR comment portal under docket USTR-2026-0694, a window of roughly four business days from the notice reaching public inspection.
For ocean carriers, non vessel operating common carriers, retail importers and agricultural exporters, the practical effect of the notice is straightforward. The fees that USTR calculated last year at up to 120 dollars per discharged container, and at up to 80 dollars per net ton for Chinese owned and Chinese operated ships, would remain uncollected into the new year. The ship to shore crane and cargo handling equipment duties that were tied to the same action would also stay dormant.
What the notice does not do is equally important. The proposal addresses the maritime annexes of the Section 301 shipbuilding action. It does not address the 178 remaining product exclusions from the separate Section 301 tariffs on Chinese goods, which are still scheduled to lapse at 11:59 p.m. Eastern on Nov. 9. Importers who assumed a single notice would clear the whole November calendar will need to plan for a split outcome.
What the fees are and what they would cost
The fee structure at issue comes out of USTR’s investigation into China’s acts, policies and practices in the shipbuilding, maritime and logistics sectors, and it is organized into annexes that target different categories of vessel.
Annex I applies to vessels owned or operated by Chinese entities. According to the schedule compiled by Sandler, Travis and Rosenberg in its tariff actions resource and by the law firm HFW in its analysis of the October 2025 modifications, the Annex I charge started at 50 dollars per net ton on Oct. 14, 2025 and was set to rise to 80 dollars per net ton on April 17, 2026, then to 110 dollars in 2027 and 140 dollars in 2028. The charge is capped at five assessments per vessel per year.
Annex II applies to non Chinese operators of Chinese built vessels, and it assesses the higher of a per net ton charge or a per container charge. The opening rates were 18 dollars per net ton or 120 dollars per container discharged, scheduled to rise to 23 dollars and 153 dollars on April 17, 2026, then to 28 dollars and 195 dollars in 2027 and 33 dollars and 250 dollars in 2028.
Annex III applies to foreign built vehicle carriers at 46 dollars per net ton, a rate that replaced an earlier formulation based on car equivalent units, and is likewise capped at five assessments per calendar year.
A fifth annex carried tariffs rather than fees. Under the October 2025 changes, ship to shore gantry cranes and intermodal chassis of Chinese origin or with Chinese components faced a 100 percent duty effective Nov. 9, 2025. USTR had also floated tariffs of up to 150 percent on a wider set of cargo handling equipment, including rubber tyred gantry cranes, reachstackers and straddle carriers. None of it is in force.
The exemptions matter as much as the rates. HFW’s summary notes that Annex II carve outs cover vessels arriving empty or in ballast, voyages under 2,000 nautical miles, cellular container ships up to 4,000 twenty foot equivalent units, bulk vessels up to 80,000 deadweight tons and other vessels up to 55,000 deadweight tons. United States owned or United States flagged vessels enrolled in the Maritime Security Program, along with government vessels, are exempt until at least April 18, 2029. Cranes contracted before April 17, 2025 and delivered by April 18, 2027 are exempt from the crane duty, subject to documentation.
A tariff that was collected for less than a month
The unusual feature of this program is how briefly it has ever operated. Collection began on Oct. 14, 2025. The suspension took effect at 12:01 a.m. on Nov. 10, 2025, following the understanding reached between President Donald Trump and Chinese President Xi Jinping in South Korea. The fees were therefore live for under four weeks.
Even that short window produced real numbers. gCaptain reports that Matson recorded 6.4 million dollars in Chinese reciprocal port fees during the period the measures were active, and that COSCO faced an estimated 1.5 billion dollars in annual United States charges had the program continued. Those two figures bracket the asymmetry at the heart of the dispute. The American carrier absorbed a seven figure cost from China’s mirror image retaliation. The Chinese state carrier faced a ten figure cost from the American original.
The suspension has been rolled forward since. In September, Treasury Secretary Scott Bessent said the broader United States and China understanding reached at Busan had been extended to Jan. 10, 2027. The newly proposed vessel fee suspension would end on Jan. 9, 2027, one day before that date. The alignment is almost certainly deliberate. It keeps the maritime instrument expiring inside the diplomatic framework rather than outside it, which preserves the leverage of a short fuse while avoiding an accidental lapse during a negotiation.
USTR’s own framing in the notice is minimal. The agency states that “the United States is continuing to engage with China with the goal of obtaining the elimination of the acts” at issue in the investigation. That is the language of a measure held in reserve, not one being abandoned.
Reaction: shippers want permanence, shipbuilding advocates want collection
The constituencies on this question have not changed, and neither has the gap between them.
On the shipper side, a joint letter dated Sept. 23 and reported by Supply Chain Dive on Sept. 28 asked Ambassador Jamieson Greer to extend the suspension. Signatories included the National Retail Federation, the Retail Industry Leaders Association and the Agriculture Transportation Coalition, alongside other shipper associations, trade groups and logistics providers. The letter warned that “imposing new or resumed fees on China built or China linked vessels would create immediate and far reaching consequences” for companies that depend on ocean transport.
The groups grounded that warning in current freight conditions rather than in general opposition to the policy, citing elevated transportation costs, shifting carrier capacity, equipment shortages, port and inland network constraints and broad trade uncertainty. They argued that an extended pause would help farmers and manufacturers preserve affordable access to overseas markets, reduce the risk of retaliatory measures and support the competitiveness of American made goods abroad.
On the other side, Senators Mark Kelly and Elizabeth Warren wrote to the administration in June urging reinstatement, arguing that “Section 301 port fees are critical to revitalizing U.S. shipbuilding.” Maritime labor unions have also criticized the suspension. Their case is that the fees are the only instrument currently on the books that attaches a price to the structural advantage Chinese yards enjoy, and that a measure suspended indefinitely is a measure that does no work.
A third strand of comment concerns classification rather than principle. Atlantic Container Line chief executive Andy Abbott has argued that “ACL’s unique ships were mistakenly classified by USTR as vehicle carriers,” a dispute that matters because the Annex III rate of 46 dollars per net ton applies to a category his combination container and roll on roll off vessels arguably do not occupy. Classification fights of this kind tend to surface whenever a suspended program moves back toward collection, and the four day comment window is where they will land.
Economic impact: the cost of a measure that has never really run
Estimating the impact of the Section 301 maritime fees is unusually difficult because the program has almost no operating history. What can be said with confidence is the shape of the exposure.
The per container charge is the number that reaches consumer facing importers most directly. At 120 dollars per discharged container under the opening Annex II rate, or 153 dollars under the April 2026 step up, the fee is small relative to the landed value of a loaded forty foot box carrying consumer goods, but it is not small relative to the thin margins on commodity freight. For a retailer moving tens of thousands of containers a year on tonnage heavy trade lanes, the arithmetic runs into the millions of dollars annually, and the incidence depends entirely on contract language. Carriers with the commercial strength to pass the charge through as a surcharge will do so. Those competing for volume on spot trades will absorb part of it.
The per net ton charges under Annexes I and III fall on vessel operators rather than cargo owners, but the distinction blurs quickly. A 140 dollar per net ton charge at the 2028 rate on a large Chinese operated container ship is a substantial per call cost, and operators faced with it have two responses available. They can reroute Chinese tonnage away from American ports and deploy non Chinese tonnage on United States services, which is the behavioral change the policy is designed to produce. Or they can consolidate port calls, which reduces the number of assessments per vessel per year and concentrates volume at fewer gateways. The second response produces congestion effects that the fee schedule does not price.
The crane and cargo handling duties are the sleeper item. A 100 percent tariff on ship to shore gantry cranes of Chinese origin is not a marginal cost adjustment. Ship to shore cranes are multimillion dollar capital items with multi year lead times, and the global supply is concentrated. Port authorities planning berth upgrades have spent a year unable to price the equipment line of their capital budgets with any confidence, because the duty has been suspended rather than withdrawn and the exemption for pre April 2025 contracts expires on April 18, 2027. A two month extension of the suspension does not resolve that planning problem. It defers it.
Standing behind all of this is a much larger proposal. gCaptain notes that the administration’s Maritime Action Plan contemplates fees on all foreign built commercial vessels ranging from 1 to 25 cents per kilogram of imported cargo, which the administration has estimated could raise up to 1.5 trillion dollars over ten years at the upper end of the range. A fee denominated in cents per kilogram is a fundamentally different instrument from one denominated in dollars per container, because it falls hardest on dense, low value cargo. Steel, chemicals, paper, agricultural inputs and building materials would carry a disproportionate share. The Section 301 maritime fees, whatever their fate in November, are the smaller of the two questions on the table.
What the Nov. 9 calendar actually looks like
Because several unrelated timers happen to run out in the same week, it is worth separating them.
The Section 301 vessel fees under Annexes I, II and III expire from suspension at the end of Nov. 9. The proposed notice would carry them to Jan. 9, 2027. Certain duties on ship to shore cranes and cargo handling equipment are covered by the same proposal.
The 178 product exclusions from the Section 301 tariffs on Chinese goods, covering lists 1 through 4A at rates between 7.5 percent and 25 percent across roughly 370 billion dollars of trade, expire on Nov. 9 and are not addressed by this notice. USTR confirmed the continuation of the underlying actions in early October following its statutory review, but continuation of the tariffs is not continuation of the exclusions.
Those two facts together produce an awkward outcome for importers who buy excluded Chinese goods and move them on China built tonnage. The freight side of their cost structure would be protected into January while the duty side of it would reset on Nov. 10. Companies in that position should be modeling both legs separately rather than assuming a single policy direction.
Implications for importers, exporters and American businesses
For importers, the immediate task is contractual rather than operational. Service contracts negotiated during the suspension may or may not contain language allocating a reinstated Section 301 vessel fee. Those that are silent will be resolved by whoever has leverage at the moment the charge appears. Importers negotiating 2027 contracts in the coming weeks should insist on explicit treatment of the fee, including a definition tied to the annex structure rather than to a dollar figure that is scheduled to escalate.
Importers should also confirm whether their carriers’ deployed tonnage is exposed at all. The Annex II exemptions are broad enough that a meaningful share of smaller vessels, short sea voyages and mid size bulk carriers fall outside the charge entirely. A blanket surcharge applied across a carrier’s network is not necessarily a pass through of a cost that carrier actually incurs on the importer’s lane.
For agricultural and bulk exporters, the exposure runs the other way. The Agriculture Transportation Coalition’s participation in the September letter reflects a specific concern: export cargo competes on delivered price in destination markets where American sellers face substitutable supply from Brazil, Argentina, Australia and the Black Sea. A freight cost increase that an importer of consumer goods can pass to a domestic consumer is, for a grain exporter, a direct loss of competitiveness. Exporters should be filing comments on their own behalf rather than relying on importer coalitions whose interests align only partially.
For port authorities, terminal operators and the equipment supply chain, the planning horizon is now effectively January. Capital projects that depend on crane procurement should assume the duty question remains unresolved and should document pre April 2025 contract dates carefully where the exemption may apply.
For American shipbuilding interests, a second extension is a setback on substance but not necessarily on strategy. The measure remains on the books. The investigation findings remain intact. The escalation schedule remains written into the annexes, which means that whenever collection resumes, it resumes at the rate applicable on that date rather than at the 2025 opening rate.
Why this instrument has survived when others did not
The durability of the maritime action is worth noting against the wider legal backdrop. On Feb. 20, 2026, the Supreme Court held in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize the President to impose tariffs, a ruling that forced the unwinding of the broadest tariff program the administration had built. Customs and Border Protection has since been processing refunds on a scale with no modern precedent. A CBP declaration filed on Sept. 15 and summarized by the trade data service Novus Data put claims accepted for processing at roughly 134.7 billion dollars in potential and certified refunds across about 27.2 million import entries, with roughly 122 billion dollars including interest certified and transmitted to the Treasury.
The replacement surcharge under Section 122 of the Trade Act of 1974 fared little better. The Court of International Trade ruled against it on May 7, the Federal Circuit stayed that ruling on June 11 pending appeal, and the surcharge lapsed on its own terms at 12:01 a.m. on July 24, when new Section 301 forced labor tariffs on goods from 60 economies took effect.
Section 301 and Section 232 are what remain. Both rest on findings and procedures that courts have historically been reluctant to second guess, and both have absorbed the policy weight that IEEPA once carried. That context explains why USTR is extending a suspension rather than letting the maritime action expire. An instrument that survives judicial review is worth more suspended than a broader one that does not survive at all.
It also explains the compressed comment period. A four day window on a notice of this consequence is defensible only because the proposal continues an existing state of affairs rather than imposing a new obligation. Parties who want the fees collected, rather than suspended, are the ones with the procedural grievance, and they are the constituency least likely to be able to assemble a filing by Oct. 30.
What to watch
Three things will determine how this resolves. The first is the comment record closing Oct. 30, which will show whether the shipper coalition has held together and whether classification disputes such as the vehicle carrier question draw enough support to force technical amendments.
The second is whether China extends its own mirror measures. Beijing imposed reciprocal port fees on American linked vessels and suspended them in parallel. gCaptain notes that it is not yet clear whether China will extend its suspension alongside the American one. A one sided extension would be an unusual outcome and would signal that the Busan framework is under strain.
The third is the gap between Jan. 9 and Jan. 10, 2027. The vessel fee suspension as proposed would expire one day before the broader understanding. If the administration intends the maritime instrument to function as leverage inside that negotiation, the sequencing is logical. If the two dates drift apart in later notices, that will be the clearest available signal that the maritime track and the tariff track have separated.
For now, the operative facts for planning purposes are these. The fees are not being collected. They are proposed to remain uncollected until Jan. 9, 2027. The comment window closes Oct. 30. And the product exclusions expiring on Nov. 9 are a separate question that this notice leaves untouched.