Proposed Fees on Ocean Carriers Could Hurt Farmers

A proposal from the U.S. Trade Representative (USTR) to impose new fees on ocean carriers with ties to China could take a major toll on America’s farmers and ranchers. Two-thirds of all agriculture exports by volume are shipped overseas, and the cost of transporting them to international trading partners could increase dramatically.

In an effort to address China’s dominance in global shipbuilding and logistics, the Trump administration has proposed a series of fees targeting Chinese-operated vessels and Chinese-built vessels that access American ports. Individual fees would go as high as $1.5 million per port call. American Farm Bureau Federation economists analyzed the impact in the latest Market Intel report.

“Depending on [the fees applied], whether it’s the $1 million fee on Chinese-operated vessels, the $1.5 million fee on Chinese-built vessels, or both … bulk agricultural exporters could face an additional $372 million to $930 million in annual transportation costs,” the Market Intel states. “On a per-unit basis, these compounded fees translate to an increase of 9.5 to 27.8 cents per bushel of soybeans — representing a substantial margin loss in global markets where competitiveness is often determined by mere pennies per bushel.”

Bulk agricultural exports, particularly grains and oilseeds, are especially vulnerable. In 2024, the U.S. exported over 106 million metric tons of bulk agricultural products. Important imports like fertilizer, machinery and specialty crop supplies would also be impacted if carriers pass fee increases on to the consumer.

“Farmers support the goals of creating a level playing field for trade and strengthening the nation’s supply chain,” said AFBF President Zippy Duvall. “Unfortunately, farmers may feel the brunt of increased costs in exporting their goods. They’ve lost money on almost all major crops for the past three years. Higher freight rates could make things even worse by reducing their competitiveness overseas.”

USTR also proposes to set minimum requirements for shipping on U.S.-flagged, U.S.-operated and U.S.-built vessels. China controls more than 5,500 commercial vessels used for trade, compared to around 100 for the United States. Building more American ships will be a challenge. There are far fewer U.S. shipyards than in Asia and American ships take longer to build – up to four years – compared to Asian shipyards where a ship can be built in as little as 12 months.

Public comments on the proposed action are due on March 24.

Read the full Market Intel here.

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