The National Grain and Feed Association (NGFA) is urging its members to contact their senators and representatives to oppose proposed penalties on the use of Chinese-built vessels. The penalties are part of a Section 301 trade investigation led by the U.S. Trade Representative (USTR).
Under the proposal, the USTR is considering significant fees for using Chinese-built ships, including:
- Up to $1.5 million per Chinese-built ship entering U.S. ports
- Up to $1 million per port call for Chinese operators
- Up to $1 million for operators with new ship orders from Chinese shipyards
- Requirements for carriers to move goods on U.S.-built, U.S.-flagged vessels
A final decision on the proposal could come by April 15.
NGFA estimates these measures would increase grain and oilseed shipping costs by 50 cents to $1.25 per bushel, severely disrupting U.S. agricultural exports and threatening permanent losses in global markets.
“If enacted, this proposal would effectively eliminate half of the global bulk fleet that we need to export almost one-third of grains and oilseeds that are produced in America,” said Mike Seyfert, NGFA president and CEO. “That puts U.S. agriculture at a considerable competitive disadvantage in global markets. We are already seeing disruptions in the marketplace since the proposal was put forward, including lost sales and difficulty contracting ships.”
The administration intends to address national security concerns by strengthening the domestic maritime industry and require the movement of goods by U.S. ships. However, of the approximately 21,000 vessels in the global bulk fleet, just five in operation were built in the United States compared to nearly 50% built in China.
While NGFA supports efforts to revitalize U.S. shipbuilding, it opposes the penalties as written. In joint comments submitted to the USTR on March 24, NGFA, the North American Export Grain Association, and the National Oilseed Processors Association advocated for alternative approaches, such as:
- Shipbuilding grants
- Tax incentives for U.S. ship construction
- Reduced regulations to spur domestic maritime growth
The groups also requested an exemption for agricultural commodities — both bulk and container exports of grains, oilseeds, and co- and byproducts, along with imports of feed ingredients — if the USTR moves forward with the proposed penalties.
“Without such relief, U.S. agriculture and the positive impact it has on the broader U.S. economy would suffer significantly,” the organizations stated.
In 2024, grain and oilseed exports added $174 billion to the U.S. economy, supported 450,000 American jobs, and generated a $61 billion trade surplus.
The industry groups warned that the proposal could have the opposite of its intended economic effect, stating in their comments, “We expect this would significantly grow the United States trade deficit in agriculture, which is counter to the administration’s stated goal of reducing the agriculture trade deficit.”
