International law firm Watson Farley & Williams (WFW) on Friday (21 November) published an article by WFW New York Partner Daniel Pilarski, reviewing the United States and China’s decision to each suspend their port fees on Chinese- and US- linked vessels: 

Following the trade summit between US President Donald Trump and Chinese President Xi Jinping, the United States and China have each suspended their port fees on Chinese- and US-linked vessels, respectively, for a one-year period beginning November 10, 2025. The port fees took effect on October 14, 2025. See our earlier summaries of the United States and Chinese port fee regimes.

USTR Port Fees – Timeline and Amendments

The USTR port fees were initially enacted pursuant to an April 17, 2025 notice (the “April Notice”).

In a June 6, 2025 notice (the “June Notice”), the USTR proposed changes to Annex III (fees on non-US car carriers) and Annex IV (restrictions on US LNG exported on non-US vessels). Among the proposed changes were:

• the Annex III fees on non-US built car carriers were proposed to be changed from $150 per Car Equivalent Unit to $14 per net ton; and
• the Annex IV restriction on LNG exports for failure to comply with the requirement that a certain percentage of US LNG be exported on a US-built vessel was proposed to be eliminated.

In an October 10, 2025 notice (the “October Notice”), the USTR made further changes to the port fees and restrictions. Among the changes implemented were:

• the Annex III fees on non-US built car carriers were changed from $150 per Car Equivalent Unit to $46 per net ton (far greater than the $14 per net ton that was proposed in the June Notice);
• the Annex IV restriction on LNG exports for failure to comply with the requirement that a certain percentage of US LNG be exported on a US-built vessel was eliminated, as per the June Notice.

The October Notice also proposed additional amendments to the port fees. These changes remain under review and have not yet been finalized. Among the proposed amendments are:

• an LPG tanker that was “ordered before April 17, 2025, and is in service and entered into a long-term time charter agreement (that is, of 20 years or more) prior to December 31, 2027,” would be considered owned and operated by the time charterer for purposes of Annex I. As a result, an LPG tanker with a Chinese registered owner and/or disponent owner under a bareboat charter would not be subject to the fees on Chinese owned or operated vessels, as long as the long-term time charterer from the disponent owner is not a Chinese or Chinese-owned entity; and
• the Annex III fees on non-US built car carriers would not apply to US-flagged vessels of up to 10,000 deadweight tons. This exception will expire on April 18, 2029 unless renewed.

To alleviate uncertainty regarding the proposed amendments, the October Notice permitted port fees on vessels that would be subject to the proposed amendments (i.e. LPG tankers and car carriers falling within the scope of the amendments) to defer payment until December 10, 2025. It is unclear whether the payment would still be owed if the proposed amendments are not adopted.

USTR Port Fees – Clarifications and Questions

The subsequent USTR notices and guidance have attempted to clarify some of the open questions regarding the port fees. However, several questions remain.

1. For purposes of Annex I port fees on vessels owned by a Chinese entity in the case of a Chinese lease financing, is the ‘owner’ the registered owner/lessor or the disponent owner/lessee?

While the USTR notices have provided no further guidance as to the identity of the ‘owner’, guidance released by the US Customs and Border Protection (“CBP”) port operators for the ports of New Orleans and Houston state that “[t]he vessel owner(s) will be determined by the vessel’s Registry (REG).” While this guidance applies only to the ports of New Orleans and Houston and not other ports, the guidance suggests that in the case of a sale-leaseback financing with a Chinese lessor, the port fees would be imposed, notwithstanding that the beneficial owner of the vessel may have no Chinese nexus. The guidance further suggests that in the reverse case, where the registered owner is not a Chinese entity but the beneficial owner is a Chinese company, the port fees on Chinese owners would not apply (although the fees may still be owed if the Chinese company is the ‘operator’). 

2. For purposes of Annex II port fees on Chinese-built vessels, does the small vessel exception apply to tankers?

The April Notice exempted small vessels from the port fees on Chinese-built ships. For this purpose, a small vessel was defined as a “vessel with a capacity of equal to or less than: 4,000 Twenty-Foot Equivalent Units, 55,000 deadweight tons, or an individual bulk capacity of 80,000 deadweight tons.” This led to some uncertainty, since the meaning of “individual bulk capacity” is unclear. The reference to ‘bulk’ may have suggested dry bulk vessels, although tankers carry liquid cargo in ‘bulk’.

“Unless the suspension is lifted or modified, no such port fees will be owed during this period.”

The October Notice ‘clarified’ that the small vessel exception for vessels with individual bulk capacity of 80,000 deadweight tons may apply to both liquid bulk and dry bulk vessels. The notice listed several examples of both dry bulk vessels and vessels that can carry both dry bulk and liquid bulk cargo, but no pure tankers. The notice also did not clarify the meaning of ‘individual bulk capacity’. The reference to liquid cargo seems to suggest that the 80,000 deadweight ton limit applies to tankers as well, although the lack of examples and omission of the term ‘tanker’, as well as the lack of a definition of ‘individual bulk capacity’, may continue to result in uncertainty.

Summary of the Suspensions

Both the USTR port fees and the Chinese port fees are suspended pursuant to USTR and Chinese Ministry of Transport notices, with the suspension scheduled to last from November 10, 2025 through November 9, 2026. Accordingly, unless the suspension is lifted or modified, no such port fees will be owed during this period. The suspension of US port fees applies to fees on non-US car carriers under Annex III, notwithstanding that Annex III fees apply to all non-US car carriers equally, regardless of whether they have a Chinese nexus. Barring further extension or amendment, both sets of port fees will once again be owed for US and Chinese port calls beginning November 10, 2026. There is no provision for refund of fees incurred for port calls between October 14 and November 9, 2025.

Related: Law firm WFW on USTR 301 and retaliatory measures in China

Photo credit: Chris Pagan on Unsplash
Published: 24 November, 2025