In a positive development for food manufacturers and farmers, the Office of the US Trade Representative (USTR) on April 17 announced it was modifying proposed actions on Chinese maritime practices to make them less punitive for US manufacturers and businesses.

The original proposed actions, including fines of up to $1.5 million for each Chinese-made ship that entered a US port, could have increased shipment costs by an average of $15 to $40 per tonne, or 50¢ to $1.25 per bu, according to industry estimates, resulting in a 62% decline in US wheat exports and a 40% decline for US soybeans. Of the roughly 21,000 vessels in the world’s bulk shipping fleet, almost 50% were built in China, and only five ships (0.2%) currently operating in the global fleet were built in the United States.

“Ocean shipping is critical for US wheat growers to move their crops to market, and this step helps maintain our global competitiveness,” said Pat Clements, president of the National Association of Wheat Growers.

The International Fresh Produce Association (IFPA) also lauded the move.

“While the USTR’s actions may affect agricultural and perishable products, we appreciate that the revised fee structure appears to take several concerns unique to the agricultural sector into account,” the IFPA said. “We will continue to engage with the administration, Congress and our industry partners to promote policies that enable a resilient, efficient and competitive trade environment.”

The USTR’s modified proposal pauses all new fees for 180 days. After that period, Chinese vessel owners and operators will face a $50-per-tonne levy per US voyage. Operators of Chinese-built ships will face less punitive fines, based on net tonnage or number of containers.

Vessels logging multiple US entries will be billed once per group of US port calls, meaning they won’t accrue a separate fee for each port, as originally proposed. Industry groups had argued that requirement could place staggering penalties up to $6.5 million on even smaller vessels making a rotation of port calls on the East Coast.