USTR SECTION 301 INVESTIGATION REPORT RELEASED
Background
Members will recall, that, in March 2024, five US labour unions petitioned the US Trade Representative (USTR), Ambassador Katherine Tai, prompting an investigation into alleged unfair practices by China in the maritime, logistics and shipbuilding sectors.
Announced on 17 April 2024, the investigation followed claims by the petitioners that Chinese subsidised shipbuilding is undermining US domestic shipbuilding capacity. While the petition suggested remedial measures, such as imposing fees on Chinese-built vessels at US ports, the focus of the USTR investigation was solely on determining whether China’s acts, policies, and practices targeting the maritime, logistics, and shipbuilding sectors are unreasonable or discriminatory, without addressing potential remedies at this stage.
At the labour unions’ request, the USTR held a public hearing in Washington, D.C., on 29 May 2024. ICS, along with the World Shipping Council (WSC) and the European Community Shipowners’ Association (ECSA), submitted their respective comments prior to the hearing. WSC also participated in the hearing, providing a formal testimony along with fourteen other witnesses.
On 16 January 2025, the USTR issued its findings from the investigation, concluding that China’s targeted dominance in the maritime, logistics and shipbuilding sectors, is unreasonable and burdens or restricts U.S. commerce, and is therefore “actionable” under Section 301 of the Trade Act of 1974. The determination is supported by a comprehensive report, which is attached at Annex A.
The report states that China’s targeting of the maritime, logistics and shipbuilding sectors for dominance is unreasonable because:
1. It displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities and lessens competition.
2. It creates dependencies in China, increasing risk and reducing supply chain resilience.
3. Of China’s extraordinary control over its economic actors and ability to direct non-market advantages (such as artificially low costs or preferential supply from China’s non-market excess capacity, including in steel) to these sectors.
The findings of the USTR do not include specific recommendations of penalties against China but provide a basis for responsive action that eliminates the acts, policies or practices covered in the investigation, leaving next steps up to President-elect Donald Trump, who takes office on Monday, 20 January.
Next Steps
The ICS Secretariat will be monitoring the developments on this closely as the new U.S. administration takes office on 20 January, and members will be informed of any updates accordingly. Members are encouraged to direct any questions or comments to Rachel Noronha, Head of Shipping Policy at (rachel.noronha@ics-shipping.org).