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MSC and CMA CGM warn: US tariff on Chinese ships will hit all shipping companies, freight rates may rise by 25%
Mar 07,2025
Recently, the shipping industry was thrown into "turmoil" by a blockbuster news: the two giants of global container shipping, Both Mediterranean Shipping (MSC) and France's CMA CGM have sounded the alarm, saying that the US is plotting to impose new port fees on Chinese-made container ships, a "brutal move" that would shake up the shipping industry.
Consider MSC, whose Geneva-based chief executive, Soren Toft, worried at a shipping and supply chain event in Long Beach, Calif., that if the proposed U.S. charge materializes, container rates are likely to skyrocket, rising by as much as 25 percent.
"Don't underestimate the costs. Once they are introduced in accordance with existing schemes, the consequences are unthinkable." Toft's eyebrows were tight,“Shipping companies have been forced to either re-woven the network of routes, cut off some stations, or have to bear the extra costs. But whatever the choice, it's the consumers who end up paying for it.”
You see, shippers in America often call at multiple ports when unloading cargo. For example, in California, the usual practice is to call at Los Angeles - After Long Beach, you head to Oakland, but if you have to surrender up to $1 million in road purchase money for every stop, small ports such as Oakland, which play a key role in U.S. exports of agricultural products and other goods, may lose favor.
Citing professional assessments, Mr. Toft said the proposal could hit the industry by more than $20 billion, adding $600 to $800 to the average container cost.
On the other hand, the world's third-largest French craft, the Dauphiné, was not idle, and its chief financial officer, Ramon Fernandez, rushed to speak out, warning that the move amounted to a "blockbuster bomb" on the entire shipping industry."More than half of the world's container ships are made in China, and when the U.S. cuts them down, which shipping company can stand alone?" Fernandez's CMA Group in the "sphere of influence" in America is not small, family control, many terminals.
While asked whether the maritime alliance would be affected, he said there was no sign yet of a change in the agreement, but revealed that the group had anticipated that Trump's new tariffs would "disrupt" the shipping market this year and that the shift in trade routes could accelerate further. After all, last year, in order to avoid tariffs, the volume of shipping continued to "increase strongly," and this trend continued to the beginning of this year, but the geopolitical "black cloud" remained, and the "concern" of ship overcapacity remained. The market prospects for this year are hardly optimistic. In addition, last year's Houthi attacks in Yemen "paralysed" the Red Sea shipping lanes and caused chaos in capacity allocation. Although the Red Sea has returned to calm, a wave of old ship dismantling may return to meet new challenges.
Drewry, a backer of professional analysts, added another fire, with his latest report stating that more than 80 percent of container ships currently docked in US ports would be "hit" by the US Trade Representative's Office (USTR) proposal.
Last month, USTR launched a "grand offensive" on trade with China, planning to "raise taxes" on ships linked to China, charging up to $1.5 million a single time for Chinese-made ships that docked in US ports. This web of things has fallen, and the world's nine largest container shipping companies and all their alliances are struggling to escape.
Drewry detailed that nearly a third of the world's operating container ships are made in China (with or without Taiwan), and with the exception of China's Taiwan Changrong Shipping and South Korea's HMM, major shipping companies have Chinese-made vessels in and out of U.S. ports. According to Drewry's calculations, if the charges come into effect, the cost per container would rise by $222 to $500, and the cost of a single voyage would soar by $2 to $3 million, which would be 7 to 16 times higher than the European carbon tax.
Tracing the roots, the USTR report said that China's shipbuilding industry from 1999 accounted for 5% of the world's share all the way "counterattack." By 2023, more than 50%, which the United States considers to be "helped" by government subsidies and preferential treatment of state-owned enterprises. Compared with its own shipyards, the difference between the glory of building 70 ships in 1975 and now only five ships a year is huge, which is why this "charge check and balance" has been adopted.
Shipping companies and all parties in the trade have to keep a close eye on the situation to find life in the shipping "storm" that is about to unfold.
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