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US, China begin collecting port fees on each other's

vessels

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China says Chinese-built ships exempted from its levies

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China sanctions Korean shipbuilder for 'helping US';

launches

probe

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US aims to loosen Chinese dominance in global maritime,

bolster

US shipbuilding

By Lisa Baertlein, Liz Lee and Joe Cash

BEIJING/LOS ANGELES, Oct 14 (Reuters) - The United

States and China on Tuesday began charging additional port fees

on ocean shipping firms that move everything from holiday toys

to crude oil, making the high seas a key front in the trade war

between the world's two largest economies.

China said it had started to collect the special charges on

U.S.-owned, operated, built, or flagged vessels but clarified

that Chinese-built ships would be exempted from the levies.

In details published by state broadcaster CCTV, China

spelled out specific provisions on exemptions, which also

include empty ships entering Chinese shipyards for repair.

The China-imposed extra port fees would be collected at the

first port of entry on a single voyage or for the first five

voyages within a year, following an annual billing cycle

beginning on April 17.

Early this year, U.S. President Donald Trump's administration

announced plans to levy the fees on China-linked ships to loosen

the country's grip on the global maritime industry and bolster

U.S. shipbuilding.

An investigation during former President Joe Biden's

administration concluded China uses unfair policies and

practices to dominate the global maritime, logistics and

shipbuilding sectors, clearing the way for those penalties.

China hit back last week, saying it would impose its own port

fees on U.S.-linked vessels from the same day the U.S. fees took

effect.

Analysts expect China-owned container carrier COSCO

to be most affected, shouldering nearly half of that segment's

expected $3.2 billion cost from those fees in 2026.

In a related move, Beijing also imposed sanctions on Tuesday

against five U.S.-linked subsidiaries of South Korean

shipbuilder Hanwha Ocean which it said had "assisted and

supported" a U.S. probe into Chinese trade practices.

China also launched an investigation into how the U.S. probe

affected its shipping and shipbuilding industries.

FREIGHT FRIGHT

"This tit-for-tat symmetry locks both economies into a

spiral of maritime taxation that risks distorting global freight

flows," Athens-based Xclusiv Shipbrokers Inc said in a research

note.

A Shanghai-based consultant who advises global companies on

trade with China said the new fees may not be very disruptive to

the industry and any rising costs probably would be captured in

higher prices.

"What are we going to do? Stop shipping? Trade is already

pretty disrupted with the U.S., but companies are finding a

way," the consultant said, asking to remain anonymous as he was

not authorised to speak with the media.

The U.S. announced last Friday a carve-out for long-term

charterers of China-operated vessels carrying U.S. ethane and

LPG, deferring the port fees for them through December 10.

But ship-tracking company Vortexa identified 45 LPG-carrying

VLGCs - 11% of the total fleet - that would still be subject to

China's port fee, its Americas analyst Samantha Hartke said.

Clarksons Research said in a report that the new port fees

could affect oil-tankers accounting for 15% of global capacity.

Jefferies analyst Omar Nokta estimated that 13% of crude tankers

and 11% of container ships in the global fleet would be

affected.

RETALIATION

In a reprisal against China curbing exports of critical

minerals, Trump on Friday threatened to slap additional 100%

tariffs on goods from China and put new export controls on "any

and all critical software" by November 1.

Administration officials hours later warned that countries

voting in favor of a plan by the United Nations' International

Maritime Organization to reduce planet-warming greenhouse gas

emissions from ocean shipping this week could face sanctions,

port bans, or punitive vessel charges. China has publicly

supported the IMO plan.

"The weaponisation of both trade and environmental policy

signals that shipping has moved from being a neutral conduit of

global commerce to a direct instrument of statecraft," Xclusiv

said.

Shares in Shanghai-listed COSCO rose more than 2% in early

trading on Tuesday. The company said its board had approved a

plan to buy back up to 1.5 billion yuan ($210.3 million) worth

of its shares within the next three months to maintain corporate

value and safeguard shareholder interest.

The shipping firm did not immediately respond to Reuters'

queries about the port fees.

($1 = 7.1337 Chinese yuan)