One-Year Suspension of Section 301 Port Fees Eases Shipping Cost Pressures

By Jiyeon Kim, Shawn Arita, Matthew Gammans, and Sandro Steinbach

In April 2025, the Office of the United States Trade Representative (USTR) announced new port fees on certain vessels arriving in U.S. ports as part of its Section 301 actions that resulted from a yearlong investigation of China’s maritime, logistics, and shipbuilding sectors. These Section 301 port fees took effect on October 14, 2025. As part of the recent Deal on Economic and Trade Relations with China, the U.S. suspended its Section 301 port fees for one year, effective November 10, 2025.

The Section 301 port fee policy encompasses five fee categories, two of which, outlined in Annex I and Annex II, are directly applicable to agricultural exports. Annex I imposes a fee of $50 per net ton (NT) on vessels owned or operated by Chinese entities. Annex II applies to vessels built in China but operated by non-Chinese entities, with a fee of $18 per net ton (or $120 per container). Annex II includes exemptions for empty arrivals, as well as small, short-sea, specialized, or some U.S.-owned, U.S.-flagged vessels. Both fees increase annually through 2028 and apply to the first U.S. port call of a vessel, with a maximum of five charges per vessel per year.

While these fees were not tariffs on U.S. exports, U.S. agricultural exporters raised concerns that the policy could indirectly increase their shipping costs. A previous ARPC White Paper (Kim et al., 2025) analyzed the potential impact of the USTR’s port fees on dry bulk and containerized exports, assuming fixed distri- bution of vessels entering the U.S., vessel trips, and vessel ownership. The results indicate that these fees could increase shipping costs for U.S. agricultural exports by $2.3 billion (potentially reaching up to $6.2 billion by 2028 with an annual increase in fee rate), with most of the impact driven by the Annex I fee.

Figure 1 summarizes the projected costs of Annexes I and II for container and dry bulk vessels. Vessels carrying bulk agricultural exports would be particularly vulnerable to the fees because they transport lower-value products per ton. Under the October 2025 Annex I fee schedule, total Annex I fees are projected to amount to approximately 0.23% of the U.S. seaborne agricultural export value in 2024. However, the burden would be considerably higher for major bulk commodities such as corn, soybeans, and wheat. For these crops, simulated initial fees translate to roughly 0.6−0.8% of 2024 shipment value, about 5 to 7 cents per bushel.

Figure 1: Projected Costs of Section 301 Port Fees (Annex I & Annex II).

Note: The original fee structure for Annex II is the higher of $18−33/NT or $120−250/TEU. Estimated costs for Annex I and Annex II are calculated using 2024 data and shown as a percentage of the total export value.

Source: Adapted from Kim et al., 2025.

Initial market data indicate that bulk freight rates on U.S. export routes to China increased following the announcement of the Section 301 port fee. To examine the impact of port fees on bulk freight costs, we compare U.S. bulk freight rates to China with rates on competing routes from Western Canada and Brazil, in Figure 2. Before USTR announced the final action, average Pacific Northwest (PNW)-to-China bulk freight rates were approximately $1.36/MT lower than rates from Western Canada, about 3.5−3.7 cents per bushel lower for corn, soybeans, and wheat, or roughly 5% of the Western Canada rate. After the announcement, this gap narrowed to $0.67/MT (approximately 1.7−1.8 cents per bushel), indicating that U.S. PNW rates increased relative to Canadian rates. The port fee announcements thus eroded the U.S. PNW freight advantage by roughly 1.8−1.9 cents per bushel, or approximately 50% of the original competitiveness advantage (Figure 2 panel (a)).

A similar pattern is observed on U.S. Gulf routes. Following the announcement, the average freight rate premium for U.S. Gulf-to-China shipments relative to Brazil-to-China shipments rose from $13.09/MT to $14.10/MT, translating from approximately 35.6 to 38.4 cents per bushel for soybeans. This $1.01/MT increase represents an additional 2.7 cents per bushel in cost premium for soybeans, or approximately an 8% increase in the U.S. cost disadvantage. The port fee announcements thus increased U.S. freight costs relative to Brazilian alternatives from 133% to 138% of the Brazilian rate, eroding U.S. competitiveness (Figure 2 panel (b)).

Figure 2: Bulk Freight Rates on Routes to China.

Note: Panel (a) shows the bulk freight rate from the U.S. Pacific Northwest (PNW) to North China and from Western Canada to South China. Panel (b) shows bulk freight rates from the U.S. Gulf and Brazil to North China. The premium is calculated as the difference between freight rates from the U.S. and competing routes.

Source: NDSU using data from Fastmarkets.

These observed impacts on freight rates are considerably smaller than the projected costs estimated in Kim et al. (2025), which simulated initial fees of roughly 5 to 7 cents per bushel for major bulk commodities. However, this initial ex-post assessment is very preliminary and based on limited market data covering only the brief period between the port fee announcement and its suspension. The observed freight rate changes may not fully capture the policy’s potential impacts, as market adjustments were still underway when the fees were suspended. The difference between our ex-ante projections and these early ex-post observations warrants further investigation as more comprehensive data become available.

The suspension of Section 301 port fees temporarily restores U.S. competitiveness in bulk exports. However, longer-term shipping challenges remain, including ongoing uncertainty in U.S.-China trade relations and structural challenges in global shipping markets. Continued policy attention and long-term shipping strategy will be needed to maintain U.S. competitiveness in agricultural exports.

References

Kim, Jiyeon, Matthew Gammans, Shawn Arita, and Sandro Steinbach (2025). Assessing the Costs to Agricultural Exporters of Section 301 Annex 1 and 2 Fees. ARPC White Paper 2025-02. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.358893.