How US’ proposed $1.5m tariff may affect China’s maritime dominance

The fines alone are seen as insufficient to disrupt Beijing’s shipbuilding.

The US Trade Representative's (USTR) proposal to impose a $1.5m tariff on Chinese-built vessels entering Washington’s ports may not be enough to impact Beijing’s shipbuilding industry.

“The threat of US fines alone is unlikely to disrupt China's shipbuilding industry, given its advantages in lower production costs and strong domestic demand,” said ING in its latest analysis.

Last month, USTR announced its proposal to look into China's growing domination of the shipbuilding, maritime, and logistics sectors.

Still, ING said it is “too early to gauge the impact on China's shipbuilding sector due to the high level of uncertainty surrounding the implementation of such a plan.”

“As seen during the early days of Trump's administration, many measures could serve as bargaining chips rather than actually being enacted,” it added.

However, ING warned that this policy could dampen one of China's promising export growth areas. The East Asian superpower’s ship exports surged 56.6% to $43.4b last year, making it one of the fastest-growing export categories.

“If buyers shift away from Chinese shipbuilders to avoid this risk, the rapid growth rate could be hindered, dealing another blow to China's exports. This demand is more likely to be redirected to other Asian economies like South Korea and Japan rather than the US,” ING said.

Overall, whilst China's shipbuilding sector is growing, it is not a particularly significant contributor to economic growth, ING noted. In 2024, ship exports accounted for around 1.2% of total exports and approximately 0.2% of the country’s gross domestic product.