New BIMCO clause to target legal uncertainty from US tariffs on China-linked vessels

June 6, 2025, by Sara Kosmajac

Denmark-headquartered shipping association BIMCO has kick-started the development of a standard industry clause that would tackle the contractual uncertainties brought on by the United States Trade Representative’s (USTR) Notice of Actions to impose tariffs on Chinese-related vessels calling US ports.

As a response to the Section 301 investigation of China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance, in February 2025, the USTR proposed a set of tariffs that would be charged to every vessel built in China or owned by companies based in the East Asian country. The initial idea was to impose fees of up to $1.5 million, a decision that amassed criticism and scrutiny from numerous corporations as well as organizations.

In April, the US government, led by President Donald Trump, reintroduced the tariffs, this time based on net tonnage or containers, increasing incrementally over the following years, with the fee starting at $18/NT or $120 per container. The measures are set to come into effect in October and get a boost every April.

Representatives from BIMCO have underscored, however, that this plan could place ‘too much pressure’ on the consumers, maritime industry stakeholders, as well as the entire supply chain, particularly as it does not provide a ‘comprehensive’ response.

Given that China has the capacity to build well over 1,000 vessels per year (as opposed to the US capability to construct just 5 units annually), David Loosley, BIMCO Secretary General & CEO, further warned that: “When implemented, the measures will significantly raise the cost of seaborne trade to and from the United States. Additionally, the actions present complex contractual challenges for the shipping industry, which is responsible for transporting around 90 percent of world trade.”

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Recognising the complexities, the BIMCO Documentary Committee decided to prioritize the drafting of clauses to support the shipping industry in navigating the new rules.

“A BIMCO subcommittee comprising legal and commercial experts has been established and work on a clause is already underway. The clause is expected to be published in the near future and further communication is planned once it is adopted,” Stinne Taiger Ivø, Deputy Secretary General & Director of Contracts at BIMCO, revealed.

As informed, while the fees may have appeared applicable in theory, practice shows a more challenging landscape marked by the fact that very few ship owners or operators own fleets where not a single unit was constructed in China. It is important to note that, in 2024 alone, shipyards based in China had clinched the majority of commissions from shipping players around the world, having secured 62% of that year’s orderbook.

The World Shipping Council (WSC) also cautioned in March this year that the fees could do more harm than good. Per WSC, the port tariffs threaten to exacerbate inflation for US consumers as well as businesses, jeopardize jobs and ‘disproportionately’ harm United States-based farmers and other exporters. The council’s CEO Joe Kramek further added that USTR’s actions will not necessarily result in China having ‘effective’ incentives to change its policies, acts or practices.

China’s state-owned giant COSCO Shipping has expressed similar criticism toward the USTR’s move(s). Calling the United States’ measures ‘discriminatory’ and ‘harmful’, the maritime transportation heavyweight has cautioned that the geopolitical tilts and shifts could undermine the entire industry’s security and resilience.

The China Association of National Shipbuilding Industry (CANSI) also called the US actions ‘unjust’, citing it as a crackdown on the country’s shipbuilding sector under what the organization has described as a “flawed investigation.”