News of China’s recent retaliatory tonnage charges on US-linked vessels has spread through the shipping market like wildfire, marking a significant step in the further escalation of ongoing trade tensions between the US and China.

A previous article summarised the report of the International Chamber of Shipping (China) Liaison office on the issue. This article highlights some issues arising as a result of these developments.

What we know so far

On 14 October 2025, the General Office of the Ministry of Transport in the PRC issued the “Measures for the Implementation of Collecting Special Port Fees for US Vessels”. This confirms that vessels with a US-nexus calling at Chinese ports will have to pay a “special port fee” calculated per net ton. The fee is payable for calls at Chinese ports from 14 October 2025 onwards and will increase annually up to 2028. Officially presented as a reciprocal response to US port fees on Chinese ships, the new levies are likely to have tangible commercial and legal repercussions for those engaged in Sino-American trade.

Which vessels are captured?

There are two classes of affected vessels:

‘Pure’ US vessels: vessels owned or operated by US nationals or entities registered in the US; vessels built in the US; or vessels flying the US flag; and
US-linked vessels: cases where a US national or a US entity directly or indirectly holds 25% or more of the voting rights or board seats in the entity owning or operating a vessel.

This second category is of key interest to shipping players because it is apt to capture standard financing arrangements (JVs, sale-and-leaseback structures) and bareboat charterparties, and affect the risk, profitability, and compliance profile of the deal. This immediately affects those with current or prospective links to the US capital markets.

Which vessels/calls are exempt?

The special port fee does not apply to Chinese-built vessels or ballast calls at Chinese shipyards. Where a vessel calls at a series of Chinese ports, the special port fee only applies to the first call, and it will not be imposed more than five times within the same 12-month period commencing 17 April 2025.

How will the Chinese authorities know if my vessel is sufficiently linked to the US?

Presently, vessels destined to call at Chinese ports are asked to self-report. The information provided by or on behalf of the vessel will be checked by the Chinese authorities, who can ask for additional information if they suspect that the information is not complete or truthful.

Owners / operators / financiers should be particularly mindful of incorrect information appearing on intelligence databases for vessels, in which they have an interest. Hill Dickinson has asked intelligence databases to take down incorrect information prejudicing clients’ interests. Failure to pay the “special port fee” means that entry/exit formalities will not be processed, leading to severe operational/cash-flow disruptions.

Are charterers not responsible for port charges?

Under a time charterparty, port charges are usually for the charterer to bear. However, the risk allocation under every contract turns on its wording. A contract may contain provisions on levies that are closer in nature to the “special port fee” than a standard port charge.

This port fee makes my contract completely unprofitable. Can I get out of the contract?

Although the new charges can have a profound effect on profitability, a change to the regulatory landscape making a contract unprofitable is not enough to allow the affected party to walk away.

Stakeholders should learn lessons from more troubled times in order to “future-proof” their contracts from acts of trade war: war risk / sanctions / force majeure clauses can be adapted to acts of trade war, material economic hardship clauses can provide a way out of a bad deal, and even a renegotiation clause can lead to a commercially workable solution. This is all the more important for borrowers, where the change to the profitability profile may have a direct impact on the servicing of the debt.

Should I just re-flag/restructure?

Chinese authorities have signalled that beneficial ownership and control tests will apply, making such manoeuvres risky both legally and reputationally if not planned meticulously and executed properly. Initial assessments indicate that many publicly listed shipping companies, especially those listed in US exchanges, may exceed the 25% U.S. beneficial ownership threshold, even if they are incorporated elsewhere and operationally headquartered outside the US.

My vessel has US links but it is presently not captured by the “special port fee”. Why should I care?

Volatility has been the name of the game for some time. Sources suggest that Chinese authorities may consider extending the measures to charterers. Equally, there is nothing to guarantee that the threshold for establishing a US link will not be lowered (especially with threats of escalation already out there).

So what do I do?

1. Review your actual and perceived corporate structure: Review shareholding structures (especially for listed entities) down to individual UBOs. Ensure that the information regarding your vessels on shipping intelligence databases is correct, bearing in mind that some of those databases provide information on beneficial owners which is not necessarily accurate.
2. Plan ahead: Begin contingency planning for compliance and documentation, particularly regarding shareholder registers and voting rights disclosures. Review existing contractual arrangements in their entirety and assess potential exposure.
3. Plan for uncertainty: Introduce provisions on who is to bear responsibility for charges imposed when those charges are disputed, and ensure enforcement through appropriate self-help remedies.
4. Future-proof existing contracts: Seek to introduce provisions to protect long-term commitments from adverse regulatory changes. It is always more difficult to renegotiate with business partners/financiers when under pressure.
5. Adapt: Use familiar clauses and adapt the language to cover trade war risks. Review your standard wording for loopholes. Consider whether any corrective actions are required to ensure that your corporate/business structures stay compliant.
6. Stay on top of the situation: Monitor regulatory updates for guidance. Keep an eye out for newly issued standard clauses (eg BIMCO USTR Clause for Time Charter Parties 2025, Intertanko US Chinese Nexus Fees Clause for period time charters, Intertanko Liability for US Chinese Nexus clause).
7. Ask the right questions: Vet your counterparty before entering into a contract and turn the responses into contractual obligations.
8. Ask the right people: Liaise with your legal advisors for updates and prompt/pro-active action Seek input from local practitioners.
   Source: Hill Dickinson