*

Fees could backfire by swamping major U.S. seaports,

imperiling

exports and sticking everyday Americans with higher prices

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MSC, the biggest container carrier, says it could skip

small

U.S. ports to reduce fees

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World Shipping Council calls on U.S. to reconsider plan

By Lisa Baertlein

LOS ANGELES, March 7 (Reuters) - President Donald

Trump's plan to revitalize the U.S. shipping industry could heap

massive costs on ocean transport operators and spawn a new round

of supply chain chaos around the world, executives told

Reuters.

Trump's administration aims to pay for an American

shipbuilding comeback with help from potentially hefty port fees

on Chinese-built vessels as well as ships from fleets with

China-made vessels, according to a draft executive order seen by

Reuters on Thursday.

The levies could hit virtually every ship calling at U.S.

ports, foist up to $30 billion of annual costs on American

consumers and double the cost of shipping U.S. exports,

according to the World Shipping Council (WSC), which represents

the liner shipping industry.

"Policymakers must reconsider these damaging proposals and

seek alternative solutions that support American industries,"

WSC CEO Joe Kramek said.

While the stated goal of Trump's plan is to revive the

moribund U.S. shipbuilding industry and weaken China's global

shipping dominance, the dour outlook from industry executives

shows how Trump's pro-U.S. policies can sometimes bring on

unintended consequences that run counter to his stated goals.

The plan is a "curve ball" that could be very damaging for

ocean carriers and their customers, Jeremy Nixon, CEO of

container ship owner Ocean Network Express (ONE), said

at S&P Global's ( SPGI ) TPM container shipping conference in Long Beach,

California, this week.

In the near term, ship owners could make fewer U.S. port

calls to limit fees. A flood of extra cargo could clog up those

ports, making it harder to get imports to retailers and

manufacturers and exports on ships, executives said.

The Trump plan could also put pressure on companies to

redeploy their global ship fleets so that vessels that weren't

built in China are refocused on the United States market -

something that could cost time and money, they said.

MSC, world's largest container carrier, could skip

smaller ports like California's Port of Oakland - an important

gateway for exports of fresh beef, dairy products and almonds -

to mitigate the impact, Soren Toft, the company's CEO said at

TPM.

Such moves could swamp the nation's biggest ports and freeze

out the smaller ones, risking a repeat of early pandemic backups

that hobbled global trade flows, executives warned.

"It would be very difficult for us and our partners to

absorb it all at once," Beth Rooney, director of the U.S. East

Coast's largest port of New York and Jersey, said of the

potential volume spike.

PUNISHING UNKNOWN PAST MISTAKES

"If a regulation comes, let's at least make it

forward-looking and not penalize us for mistakes we've done in

the past, which we did not know were mistakes," MSC's Toft said,

referring to fees tied to China-built ships.

Meanwhile, French container carrier CMA CGM, which has a

vessel-sharing alliance with China's COSCO Shipping

and counts retailing giant Walmart ( WMT ) as a top customer, is

expanding its U.S.-flagged American President Lines fleet and

exploring having ships made here.

"We are in talks with several shipyards to see how long it

would take and at what cost," CEO Rodolphe Saadé said in an

interview published on Friday.

Denmark's Maersk on Friday told Reuters it was

premature to comment on new tariffs or fees, because everything

changes so quickly, and nothing is decided.