90 FR 112 pgs. 24856-24860 - Notice of Proposed Modification of Action in Section 301 Investigation of China's Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance
Type: NOTICEVolume: 90Number: 112Pages: 24856 - 24860
Pages: 24856, 24857, 24858, 24859, 24860FR document: [FR Doc. 2025-10660 Filed 6-11-25; 8:45 am]
Agency: Trade Representative, Office of United States
Official PDF Version: PDF Version
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Notice of Proposed Modification of Action in Section 301 Investigation of China's Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance
AGENCY:
Office of the United States Trade Representative (USTR).
ACTION:
Request for comments.
SUMMARY:
USTR requests written comments regarding potential modification of certain aspects of the trade action in connection with the Section 301 investigation of China's targeting of the maritime, logistics, and shipbuilding sectors for dominance. The U.S. Trade Representative has determined to propose that it is appropriate to modify the action by: for Annex III, providing for a targeted coverage provision pertaining to vessels in the Maritime Security Program and changing the basis of the fee to net tons; and for Annex IV, eliminating paragraph (j), retroactive to April 17, 2025, under which USTR may direct the suspension of LNG export licenses until the terms of paragraph (f) of this Annex are met. USTR also seeks comments on changing the data reporting requirements in paragraph (k) and applying Annex IV restrictions to vessel owners or operators.
DATES:
June 6, 2025: Comment period opens.
July 7, 2025: To be assured of consideration, submit written comments regarding the proposed modification of the action by this date.
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FOR FURTHER INFORMATION CONTACT:
Megan Grimball and Philip Butler, Chairs of the Section 301 Committee; Thomas Au, Associate General Counsel; or Henry Smith, Anjani Nadadur, or David Salkeld, Assistant General Counsels at 202.395.5725.
SUPPLEMENTARY INFORMATION:
A. Background
On April 17, 2024, the U.S. Trade Representative initiated an investigation of China's acts, policies, and practices targeting the maritime, logistics, and shipbuilding sectors for dominance. See 89 FR 29424 (April 22, 2024).
On January 16, 2025, USTR released a public report on the investigation. As detailed in the report, for nearly three decades, China has targeted the maritime, logistics, and shipbuilding sectors for dominance and has employed increasingly aggressive and specific targets in pursuing dominance. China has largely achieved its dominance goals, severely disadvantaging U.S. companies, workers, and the U.S. economy generally through lessened competition and commercial opportunities and through the creation of economic security risks from dependencies and vulnerabilities. The report is available on USTR's website at: https://ustr.gov/sites/default/files/enforcement/301Investigations/USTRReportChinaTargetingMaritime.pdf.
Based on the information obtained during the investigation and taking into account public comments and the advice of the Section 301 Committee and appropriate advisory committees, the U.S. Trade Representative determined that China's targeting of the maritime, logistics, and shipbuilding sectors for dominance is unreasonable and burdens or restricts U.S. commerce, and thus is actionable under Sections 301(b) and 304(a) of the Trade Act of 1974, as amended (Trade Act) (19 U.S.C. 2411(b) and 2414(a)). See 90 FR 8089 (January 23, 2025).
On February 21, 2025, the U.S. Trade Representative proposed that action was appropriate and to take responsive action in the form of service fees and restrictions against certain maritime transport services. The U.S. Trade Representative also proposed that certain maritime transport service fees and restrictions would be applicable on a nondiscriminatory basis. See 90 FR 10843 (February 27, 2025). USTR received comments on the proposal and held a two-day public hearing on March 24 and 26, 2025. USTR received nearly 600 comments and nearly 60 individuals participated in the public hearings.
On April 9, 2025, the President issued Executive Order 14269 titled Restoring America's Maritime Dominance, 1 which states that "[i]t is the policy of the United States to revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity." In implementing this policy, Executive Order 14269 addresses actions in this investigation (Section 5) and also describes additional policies to broadly address China's targeting of the maritime, logistics, and shipbuilding sectors for dominance, including:
Footnotes:
1 ?Executive Order 14269 is available at: https://www.federalregister.gov/documents/2025/04/15/2025-06465/restoring-americas-maritime-dominance .
• The creation of a Maritime Action Plan (Section 3).
• The engagement of allies and partners to align trade policies, including with respect to this investigation (Section 7).
• Efforts to reduce dependence on adversaries by recommending incentives for shipbuilders in allied nations to undertake capital investment in the United States (Section 8).
• The development of a legislative proposal for a maritime security trust fund that considers using revenue, including from this action, to establish a reliable, dedicated funding source for programs under the Maritime Action Plan (Section 9).
On April 17, 2025, pursuant to Sections 301(b), 301(c), and 304(a) of the Trade Act (19 U.S.C. 2411(b), 2411(c), and 2414(a)), the U.S. Trade Representative determined to take action in this investigation. After carefully reviewing the public comments and testimony from the two-day public hearing, and the advice of advisory committees and agencies that regulate the services involved, the U.S. Trade Representative determined that action is appropriate and that appropriate and feasible action in this investigation includes the actions as provided in Annexes I, II, III, and IV of the April 17 determination. The actions announced in the April 17 determination are occurring in two phases. For the first 180 days following the April 17 determination, the applicable fees will be set at $0. In the first phase, beginning on October 14, 2025, the following will be assessed:
• Fees on vessel owners and operators of China based on net tonnage, increasing incrementally over the following years;
• Fees on operators of Chinese-built ships based on net tonnage or containers, increasing incrementally over the following years; and
• Fees on foreign-built car carrier vessels based on their capacity.
The second phase, beginning on April 17, 2028, includes certain limited restrictions on the maritime transport of LNG through requirements to use domestic vessels. The action provides for suspension of the restriction for entities ordering and taking delivery of a U.S.-built vessel. See generally 90 FR 17114 (April 23, 2025) (April 17 determination).
Consistent with the President's direction in Executive Order 14269, and as reflected in the April 17 determination, the U.S. Trade Representative also proposed additional duties on ship-to-shore cranes and other cargo handling equipment. See Annex V of the April 17 determination. Potential modifications concerning these products may be addressed in a separate notice.
B. Proposed Modifications
Section 307 of the Trade Act provides that "[t]he Trade Representative may modify or terminate any action, subject to the specific direction, if any, of the President with respect to such action, that is being taken under [Section 301] if . . . such action is being taken under section 301(b) of this title and is no longer appropriate." The term "appropriate" refers to Section 301(b), which requires the U.S. Trade Representative to "take all appropriate and feasible action authorized under [section 301(c)] to obtain the elimination of [the] act, policy, or practice." Under Section 301(b), actions may no longer be appropriate if they may result in impairments to other key U.S. interests; may not reduce dependencies on China in the maritime, logistics, and shipbuilding sectors; or may present administrability concerns. For Annex III, USTR has determined to propose modifications to provide for targeted coverage for a specific program that reduces dependence on China. Furthermore, USTR proposes a modification of the fee basis described in that Annex from Car Equivalent Units to net tonnage, which is appropriate to address administrability and in light of the potential for fee evasion. For Annex IV, USTR has determined to propose eliminating the term providing for suspension of export licenses in paragraph (j) in order to allay concerns about the provision's impact on the U.S. LNG sector.
The U.S. Trade Representative has determined to propose that it is appropriate to modify the action by:
[top] • For Annex III: providing for a targeted coverage provision pertaining to vessels in the Maritime Security
• For Annex IV: eliminating the term providing for suspension of export licenses in paragraph (j), retroactive to April 17, 2025. USTR further seeks comments on changing the data reporting requirement in paragraph (k) and applying Annex IV restrictions to vessel owners or operators.
C. Request for Public Comments
In accordance with Section 307(a)(2) of the Trade Act (19 U.S.C. 2417(a)(2)), USTR invites comments from interested persons with respect to the proposed modifications addressed in Section B of this notice. USTR requests comments with respect to the following considerations in relation to the proposed modifications:
• For Annex III: the potential impact of a fee based on net tons and the suggested amount of the fee, and implications of a targeted coverage provision for the Maritime Security Program and suggested duration for such targeted coverage.
• For Annex IV: the potential impact of eliminating the term providing for suspension of export licenses in paragraph (j); applying data collection requirements under paragraph (k) to vessel operators or owners, and if not, what entity is appropriate; and applying Annex IV restrictions to vessel owners or operators, and if not, what entity is appropriate.
To be assured of consideration, you must submit written comments on the proposed modifications by July 7, 2025.
D. Procedure for Written Submissions
You must submit written comments and rebuttal comments using docket number USTR-2025-0013 on the electronic portal at https://comments.ustr.gov/s/. To submit written comments, use the docket on the portal entitled "Request for Comments Concerning Proposed Modification of Action Pursuant to the Section 301 Investigation of China's Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance."
You do not need to establish an account to submit comments. The first screen of each docket allows you to enter identification and contact information. Third party organizations such as law firms, trade associations, or customs brokers, should identify the full legal name of the organization they represent, and identify the primary point of contact for the submission. Information fields are optional; however, your comment or request may not be considered if insufficient information is provided.
Fields with a gray Business Confidential Information (BCI) notation are for BCI information which will not be made publicly available. Fields with a green (Public) notation will be viewable by the public.
After entering the identification and contact information, you can complete the remainder of the comment, or any portion of it by clicking `Next.' You may upload documents at the end of the form and indicate whether USTR should treat the documents as business confidential or public information.
Any page containing BCI must be clearly marked `BUSINESS CONFIDENTIAL' on the top of that page and the submission should clearly indicate, via brackets, highlighting, or other means, the specific information that is BCI. If you request business confidential treatment, you must certify in writing that disclosure of the information would endanger trade secrets or profitability, and that the information would not customarily be released to the public.
Parties uploading attachments containing BCI also must submit a public version of their comments. If these procedures are not sufficient to protect BCI or otherwise protect business interests, please contact the USTR Section 301 support line at 202.395.5725 to discuss whether alternative arrangements are possible.
USTR will post attachments uploaded to the docket for public inspection, except for properly designated BCI. You can view submissions on USTR's electronic portal at https://comments.ustr.gov/s/ by entering docket numbers USTR-2025-0013 in the search field on the home page.
Annex
The following text is provided for illustrative purposes only. For information only, the following proposed modifications would not affect the chapeau, Annex I, or Annex II of the April 17 Determination.
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Jennifer Thornton,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2025-10660 Filed 6-11-25; 8:45 am]
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