The new Trump threat to Australia-US trade – and it’s not tariffs

March 23, 2025 journo

Washington: The Australian shipping industry is warning that a Trump administration proposal to impose “extreme” fees on China-linked ships that visit American ports will harm trade and undermine the booming market for Australian red meat.

In a further complication for its trading partners just as President Donald Trump introduces sweeping new tariffs, the United States is planning to foist port levies of up to $US1.5 million ($2.3 million) on Chinese-built or operated ships, as well as vessels from fleets that include ships made in China.

The effort to contain China’s dominance of global shipbuilding, and boost the US’s share, began under the Biden administration and has been embraced by Trump, who this month announced his plan for a new shipbuilding office within the White House and tax incentives to “bring this industry home”.

China’s dominance of global shipbuilding is comprehensive.Credit: Getty Images

Shipping Australia, the peak industry body, said the levy could make it financially difficult for exporters to ship to the US. In particular, ships transporting meat required many powerpoints for refrigerators, and this “would likely make it quite difficult to replace China-built vessels with US-built ships”.

“An increase in maritime supply chain costs could pose a risk to the United States in that Australian exporters would be unable to afford the higher costs to access the US market, thereby forcing them to reroute production to alternative customers in other markets,” Shipping Australia said.

This would reduce consumer choice, harm the security of the US’s food supply and “likely induce inflationary pressures in the US”, it added.

The comments, which focus on the impact on Americans rather than Australian industry, were made in a formal submission to US Trade Representative Jamieson Greer. A public hearing on the proposed taxes will begin on Monday in Washington.

In the most recent edition of its industry newsletter, published on Friday, Shipping Australia went much further, warning that the “extreme” policy to impose “cumulative, severe, financial penalties” on Chinese ships could lead to widespread business failure, increased unemployment and severe disruption to global supply chains.

It would especially hit markets where the route prevented shipping lines from consolidating consignments, unless delivery times were badly blown out, the industry body said.

Australian beef exports to the US are worth more than $4 billion a year, and Australia is also America’s largest supplier of sheep and goat meat. Separately, American farmers and meat wholesalers are calling for tariffs on Australia over perceived unfair trade practices, such as Australia’s ban on importing uncooked beef products from the US.

News agency Reuters reported that the looming port fees on Chinese vessels had already had an impact, with ship owners refusing to provide offers for future exports of US coal.

Reuters obtained a letter from global coal marketing and logistics company Xcoal Energy & Resources to US Commerce Secretary Howard Lutnick warning that the fee structure could add up to 35 per cent to the delivered cost of US coal, making it uncompetitive.

“The loss of direct and indirect jobs would be catastrophic,” Xcoal chief executive Ernie Thrasher wrote.

China’s dominance of global shipbuilding is comprehensive. A March 2025 paper from the Centre for Strategic and International Studies (CSIS) in Washington found China now accounts for more than half of commercial shipbuilding production worldwide – much higher than rivals South Korea and Japan, and dwarfing the rest of the world.

The China State Shipbuilding Corporation is now the world’s biggest, and built “more commercial vessels by tonnage in 2024 than the entire US shipbuilding industry has built since the end of World War II”, the CSIS analysis said.

Even China’s privately owned shipyards are dominating. According to the CSIS, New Times Shipbuilding, the country’s largest private yard, “produced more tonnage than all of Europe, North America, Australia and New Zealand combined”.

Perth-based maritime lawyer Ashwin Nair said many of Australia’s bulk shippers were Chinese-built and no matter what the Americans finally decided, there would be a significant cost to Australian exporters.

“Whatever way you look at it, there’s going to likely be a huge additional impact that someone’s going to have to pay,” he said.

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