China’s Cosco warns US levies risk upsetting global shipping

[BEIJING] China’s largest shipping line said on Monday (Apr 21) that the Trump administration’s plan to impose levies on Chinese vessels docking at US ports would erode stability in global trade and supply chains.

Cosco Shipping Corporation’s response marked the first reaction by the Asian nation’s maritime sector, after the US put forward a plan last week to impose fees on Chinese-built and -owned ships. The proposal includes charges based on the volume of goods carried, on a per-voyage basis.

“These actions risk undermining the security, resilience, and orderly operation of global industrial and supply chains,” Cosco said in a statement. The company is a major owner and controller of vessels across all classes that are key to moving goods and cargoes across borders, including oil and gas tankers and container ships.

A spokesman for China’s foreign ministry said on Friday that Beijing would take all necessary measures to defend its lawful rights and interests.

The latest US proposal has been watered down from an earlier version, but keeps pressure on Chinese ship operators and shipbuilders. Analysts, including Omar Nokta, managing director at Jefferies, have said that while the revised plan will not upset how prices are fixed in the global shipping market, Cosco risks losing market share.

Cosco has been the target of US restrictions before. In January, the Department of Defense blacklisted the company, prompting some charterers to request brokers to not offer the Chinese firm’s vessels. Washington had sanctioned it in 2019 as well, prompting supertanker day rates to spike at that time. Those curbs were eventually lifted. BLOOMBERG