*

U.S., China set one-year pause on port fees for each

other's

ships

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Trump's port fees were aimed at rebuilding U.S.

shipbuilding,

maritime logistics

*

New fees caused scramble for non-China-linked ships,

pushing up

freight rates

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Bessent says threat of US ports action cut demand for

Chinese

ships

By Lisa Baertlein and David Lawder

LOS ANGELES/WASHINGTON, Oct 30 (Reuters) - The U.S. and

China agreed on Thursday to pause tit-for-tat fees on each

other's ships that became a major irritant in the broader trade

war between the world's two largest economies and pushed up

ocean freight costs.

The move provides a 12-month reprieve on an estimated $3.2

billion annually in fees for large Chinese-built vessels sailing

to U.S. ports and was among the trade deals reached in South

Korea by U.S. President Donald Trump and Chinese President Xi

Jinping.

Early this year, the Trump administration announced plans to

levy fees on China-linked ships to loosen the country's grip on

the global maritime industry and bolster U.S. shipbuilding.

The so-called Section 301 penalties followed a U.S. probe that

concluded China's domination of the global maritime, logistics

and shipbuilding sectors was driven by unfair practices.

U.S. Treasury Secretary Scott Bessent said on Fox Business

Network on Thursday that the Section 301 action had been put on

hold.

The U.S. Trade Representative's office did not

immediately comment whether the pause covered other U.S.

penalties on non-U.S. auto carriers built outside of China or on

ship-to-shore port cranes built in China.

China's Ministry of Commerce said in a statement that the

suspension applied to Section 301 penalties "concerning China's

maritime, logistics, and shipbuilding sectors." It added that

China also will suspend its on countermeasures and fees on

U.S.-linked ships.

The fees reportedly have cost ship operators including

China-owned COSCO and U.S.-based Matson ( MATX )

millions of dollars and disrupted vessel schedules, driving up

shipping expenses that eventually will land on consumers,

maritime experts warned.

Singapore-based shipper High-Trend International Group ( HTCO )

said in a statement that the suspension offered

immediate, material benefits to the company.

"The suspension removes a long-standing cost and policy

overhang that had affected HTCO's maritime logistics and

carbon-neutral initiatives," the High-Trend ( HTCO ) said. "This

development is expected to significantly reduce cross-border

shipping costs, improve cash-flow stability, and strengthen

investor confidence in HTCO's growth strategy."

REDUCED ORDERS

Bessent said just the threat of the Section 301 tariffs was

enough to reduce demand for China-built ships.

"Chinese shipbuilders have seen substantial diminution or

decreases in their order books," Bessent said.

Orders for Chinese ships have fallen from last year as part of

an overall decline this year. However, data shows that China

continues to dominate ship orders.

Chinese shipyards captured 53% of all global ship orders by

tonnage during the first eight months of 2025, according to a

the Center for Strategic and International Studies (CSIS)

analysis of S&P Global data.

(Editing by Cynthia Osterman)