Our Mallory Alexander team is closely monitoring recent trade developments as the United States Trade Representative (USTR) moves forward with proposed actions under Section 301 of the Trade Act of 1974. These measures, aimed at addressing China’s increasing influence in the maritime, logistics, and shipbuilding sectors, could have significant implications for global supply chains and shipping operations.

Background on the USTR Investigation
On March 12, 2024, multiple U.S. labor unions—including the United Steelworkers (USW), the International Brotherhood of Electrical Workers (IBEW), and the International Association of Machinists and Aerospace Workers (IAM)—filed a petition urging the USTR to investigate China’s policies in these sectors. After a thorough review, the USTR concluded that China’s attempts to dominate these industries lead to market imbalances, stifle competition, and pose risks to U.S. economic security.

Proposed Trade Actions
To address these concerns, the USTR has proposed the following summarized measures:

• Service Fees on Chinese-Built Vessels and Operators – Fees of up to $1.5 million may be imposed on vessel operators using Chinese-built ships entering U.S. ports. Additional fees may apply based on fleet composition and future vessel orders from Chinese shipyards.
• Incentives for U.S.-Built Vessels – Operators may receive refunds on these fees if they utilize U.S.-built vessels for international maritime transport.
• Restrictions on U.S. Exports via Foreign Ships – The proposal mandates that increasing percentages of U.S. goods must be transported on U.S.-flagged and U.S.-built vessels, reaching a minimum of 15% by 2032.
• Data Security Measures – The USTR also plans to investigate and potentially restrict Chinese digital logistics platforms, such as LOGINK, from accessing U.S. shipping data and operations.

Next Steps
The USTR is soliciting public comments on these proposed measures, with key deadlines approaching:

• March 10, 2025 – Deadline for submitting requests to participate in the public hearing.
• March 24, 2025 – Deadline for written comments and public hearing at the U.S. International Trade Commission.
• March 31, 2025 – Deadline for post-hearing rebuttal comments.

If implemented, these trade actions could lead to increased shipping costs, potential disruptions in international trade routes, and changes in sourcing strategies for carriers and shippers. Mallory Alexander remains committed to keeping our clients informed of regulatory changes that may impact global trade operations. As the situation evolves, we will continue to provide updates and strategic guidance on how best to navigate these potential disruptions.

For more information or assistance in assessing the impact of these trade actions, please contact your Mallory Alexander representative.