Chinese shipbuilding industry

China charging fees to third party companies from third party countries would result in animosity towards China and loss of market share, in the long run. The perception of US and China is not the same. Western world countries will always gravitate towards US if forced with a hard choice.

This whole fees on Chinese ships issue is, dare I say, more damaging to China than any tariff or any US measure towards China to date.
With Huawai, it was targeting of a single company, albeit the biggest in its field. This time around, US is targeting a whole industrial sector. (plus COSCO would be a secondary casualty)

I would have said a logical response from shipping companies would be to spin off a separate company which will do business exclusively with the US, using non-Chinese ships. But I am pretty confident next step of US plan will be to thwart such moves and sanction companies which try to do that. Going so far that banking services are withheld to such companies, that individuals behind such companies are sanctioned personally, and so on.

There will also be US pressure on third party countries to stand alongside US on the whole matter, as well.

manqiangrexue said:

That's basically what I said except the way I worded it, doesn't make us look US-centric. Our rules are ours, and don't depend on American rules. Therefore it closes the loophole for the US to just charge and take all the fees from everyone with us taking nothing. It prevents our rule from being countered simply by having different rates for different ships at US docks, high for Chinese ships, trivial for others. It also prevents companies from using falsified US payment documents to get out of payment with us because for sure, American port authorities are not going to be cooperative if they get a call from China's port authorities asking to authenticate an American payment document.

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China needs to demand more marine trade in RMB. That will weaken the $US and compensate for any loss in docking fees.

It seems to be much milder than the original proposal

PLAN Otaku said:

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It seems to be much milder than the original proposal

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Yep. Here is another one from BBC.


Quoting the measures taken.

Fees on Chinese vessel owners and operators of ships built in China will be based on the weight of their cargo, how many containers they carry or the number of vehicles onboard.

For affected bulk vessels, the fee will be based on the weight of their cargo, while the charge for container ships will depend on how many containers a vessel is carrying.

The $50 per ton of cargo will rise by $30 a ton each year for the next three years. Fees on Chinese-built ships will start at $18 a ton or $120 per container and also rise over the next three years.

Non-US built ships carrying cars will be charged $150 per vehicle.

The fee will be applied once per voyage on affected ships and not more than five times a year.

The USTR also decided not to impose fees based on how many Chinese-built ships are in a fleet or based on prospective orders of Chinese ships, as it had originally proposed.

Empty vessels that arrive at US ports to carry bulk exports like coal or grain are exempted.

Vessels that move goods between American ports as well as from those ports to Caribbean islands and US territories are also exempted from rules, as are US and Canadian ships that call at ports in the Great Lakes.

The fees are much lower than a plan floated in February to charge up to $1.5m (£1.1m) for each American port a Chinese ship visits.

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Also, some separate measures coming down the line for LNG carriers.

The USTR said a second phase of actions will begin in three years to favour US-built ships carrying liquified natural gas (LNG). These restrictions will rise incrementally over the following 22 years.

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Totoro said:

China charging fees to third party companies from third party countries would result in animosity towards China and loss of market share, in the long run. The perception of US and China is not the same. Western world countries will always gravitate towards US if forced with a hard choice.

This whole fees on Chinese ships issue is, dare I say, more damaging to China than any tariff or any US measure towards China to date.
With Huawai, it was targeting of a single company, albeit the biggest in its field. This time around, US is targeting a whole industrial sector. (plus COSCO would be a secondary casualty)

I would have said a logical response from shipping companies would be to spin off a separate company which will do business exclusively with the US, using non-Chinese ships. But I am pretty confident next step of US plan will be to thwart such moves and sanction companies which try to do that. Going so far that banking services are withheld to such companies, that individuals behind such companies are sanctioned personally, and so on.

There will also be US pressure on third party countries to stand alongside US on the whole matter, as well.

Click to expand...

Those fees would be charged as a general docking fee targetting nobody, but they can be waived as China sees fit, for example when docking a Chinese-built ship.

The rest of it boils down to two things. Firstly, China should be fully prepared to stop trade with the US. No exports, no imports so the fee for a ship to dock from China to the US is made irrelevent. Secondly, China needs to protect its trade with other countries. If America pushes secondary sanctions, it could end up a bifurcation of countries that either deal with China, using our production capabilities to enhance their lifestyles, and countries that deal with the US, essentially getting tariffed to trade in overpriced crap until the whole lot of them go into recession like in Europe.

Lastly, we absolutely need to wreck Boeing for this. Even without this, Boeing should be banned from China for is abysmal safety record.

Totoro said:

China charging fees to third party companies from third party countries would result in animosity towards China and loss of market share, in the long run. The perception of US and China is not the same. Western world countries will always gravitate towards US if forced with a hard choice.

This whole fees on Chinese ships issue is, dare I say, more damaging to China than any tariff or any US measure towards China to date.
With Huawai, it was targeting of a single company, albeit the biggest in its field. This time around, US is targeting a whole industrial sector. (plus COSCO would be a secondary casualty)

I would have said a logical response from shipping companies would be to spin off a separate company which will do business exclusively with the US, using non-Chinese ships. But I am pretty confident next step of US plan will be to thwart such moves and sanction companies which try to do that. Going so far that banking services are withheld to such companies, that individuals behind such companies are sanctioned personally, and so on.

There will also be US pressure on third party countries to stand alongside US on the whole matter, as well.

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anyone that goes with the US on this issue deserves what they get then. you can't reason people out of irrationality, otherwise it wouldn't be irrational.

also what would prevent ships from unloading in Mexico and Canada then driving them over the border to the US? End result: no port fees paid but still higher import prices due to additional freight and customs.

With 245% tariff on Chinese good and the heavy port fees on Chinese built ships, I don't think there will be much export from China direct to USA. I won't be surprise if Trump will further raise the tariff.

China is already preparing for decoupling by planning to redirect goods currently export to US, to China domestic market. Though China can still do indirect export to US by selling semi-finished goods to a third country which will add value to the finished goods to qualify it as Made in XXX country (not China).

China's shippings can totally avoid US ports since decoupling would likely make shipments drop to sepeculated 5%-10% of previous year's volume. Therefore it won't really hurt China much to impose heavy fees for ships sailing from US ports and carry US origin goods.

The major corporate losers would be factories that make their goods specifically to be sold in US, and many of these Chinese factories are actually owned, or controlled by indirect ownership, by US companies. Example is Mattel.

Like China said, there is no winner in trade war. The best strategy to to minimise losses by developing other overseas market by investing factories and retails there to diversify trading partner base. Enriching China's trading partners (other than US) can increase demand for China made goods. In fact Belt and Route Initiative by China many years ago is doing this exactly.

Totoro said:

China charging fees to third party companies from third party countries would result in animosity towards China and loss of market share, in the long run. The perception of US and China is not the same. Western world countries will always gravitate towards US if forced with a hard choice.

This whole fees on Chinese ships issue is, dare I say, more damaging to China than any tariff or any US measure towards China to date.
With Huawai, it was targeting of a single company, albeit the biggest in its field. This time around, US is targeting a whole industrial sector. (plus COSCO would be a secondary casualty)

I would have said a logical response from shipping companies would be to spin off a separate company which will do business exclusively with the US, using non-Chinese ships. But I am pretty confident next step of US plan will be to thwart such moves and sanction companies which try to do that. Going so far that banking services are withheld to such companies, that individuals behind such companies are sanctioned personally, and so on.

There will also be US pressure on third party countries to stand alongside US on the whole matter, as well.

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So Let me get this straight, the US impose fees on Chinese shipping companies and Chinese shipping companies docking in the US.

So it gives advantage to non Chinese shipping companies with non Chinese ships to dock in US ports. Which undoubtedly will increase prices for US customers and exporters.

While Chinese companies and ships will just dock at other countries. Its really a death kneel for US companies manufacturers and exports.

This is much less disruptive than their attempt to destroy Huawei. With Huawei, the export controls could have prevented the company from making products altogether! And 5g communications is just at much of a strategic industry as so building.

If the US wasn't able to get other countries to block Huawei altogether, how are they gonna get other countries to block Chinese ships? Especially when ports are many more countries than 5g infrastructure.

Totoro said:

China charging fees to third party companies from third party countries would result in animosity towards China and loss of market share, in the long run. The perception of US and China is not the same. Western world countries will always gravitate towards US if forced with a hard choice.

This whole fees on Chinese ships issue is, dare I say, more damaging to China than any tariff or any US measure towards China to date.
With Huawai, it was targeting of a single company, albeit the biggest in its field. This time around, US is targeting a whole industrial sector. (plus COSCO would be a secondary casualty)

Click to expand...

The proposal "China charging 3rd party ships who dock in US" isn't exactly what China hasn't done yet. Look at the market share of Ericsson and Nokia in China after Huawei was targetted by US, their shares are ignorable. China didn't specifically target them, Ericsson even voiced objection of Europe banning Huawei, but still. In such a war, it is not personal, if China looses in one place China will get compansated from elsewhere beginning with people who benefit from China's lose. Regarding the animosity, everyone knows what is going on, for the one who sticks to US it doesn't matter if China charges them, for the one sitting on the fence they will work out something like what you proposed "splitting their fleet" below. And no harm would be done to them.

Totoro said:

I would have said a logical response from shipping companies would be to spin off a separate company which will do business exclusively with the US, using non-Chinese ships. But I am pretty confident next step of US plan will be to thwart such moves and sanction companies which try to do that. Going so far that banking services are withheld to such companies, that individuals behind such companies are sanctioned personally, and so on.

There will also be US pressure on third party countries to stand alongside US on the whole matter, as well.

Click to expand...

US doing this is like sanctioning countries for doing business with Russia, it was just in a smaller scale. Sure they can try in a larger scale which is further deviding the world in two camps. This isn't a choice of China but rest of the world. It is like a world war of economics (spreading from limited countries to the world). I won't say US wouldn't go that far as Germany and Japan had shown us how far it can go, but it is a path that China can not avoid but follow through.

Chinese oil tankers are the next target?