A proposal from the Trump administration to impose new fees on ocean carriers with ties to China could significantly impact American farmers and ranchers by increasing export costs, according to the American Farm Bureau. Since two-thirds of U.S. agricultural exports are shipped overseas, higher transportation expenses could make it more difficult for farmers to compete in global markets.
The proposed fees aim to counter China’s dominance in global shipbuilding and logistics. Under the plan, Chinese-operated vessels calling at U.S. ports would be charged up to $1 million per visit, while ships built in China would face fees as high as $1.5 million. According to an analysis by the American Farm Bureau Federation (AFBF), the new costs could add between $372 million and $930 million in annual transportation expenses for bulk agricultural exporters.
For key exports like soybeans, the additional shipping costs could translate to an increase of 9.5 to 27.8 cents per bushel. With profit margins already thin, such increases could weaken U.S. farmers’ ability to compete in international markets, where even a few cents per bushel can make a difference.
Beyond exports, the proposed fees could also affect essential imports, including fertilizer, machinery, and supplies for specialty crops, if shipping companies pass the costs to consumers.
“Farmers support fair trade and a strong supply chain,” said AFBF President Zippy Duvall. “But these fees could further strain an industry that has already seen financial losses on most major crops over the past three years.”
The administration is also considering rules that would require more shipping to be done on U.S.-built and U.S.-operated vessels. However, with China controlling more than 5,500 commercial ships compared to just 100 for the U.S., and with American shipbuilding taking significantly longer than in Asia, meeting such requirements could be challenging.
Public comments on the proposed fees and regulations are due by March 24.