The Office of the US Trade Representative (USTR) announced on February 21, 2025, the initiation of the second phase of its ongoing Section 301 investigation into China’s acts, policies and practices relating to the maritime, logistics and shipbuilding sectors. This second stage of the investigation (known as the remedies phase) will consider a list of potential actions, fees or measures designed to counteract China’s targeted dominance of the shipbuilding and maritime transportation industries.
In conjunction with the announcement of this second phase of the investigation, USTR published a Federal Register notice setting out a very aggressive schedule for this final phase of the investigation, and detailing a series of proposed actions. The USTR’s proposed actions raise myriad issues, including as to the legality of some of the actions. Virtually all of the proposed fees or restrictions on services will present unprecedented challenges to the global shipping industry, and threaten to harm not just the targeted Chinese industries, but also shipping interests around the world, as well as companies and individual consumers in the US.
This client alert will provide background on this Section 301 investigation, provide a quick overview and assessment on some of the proposed remedies, highlight some of the novel issues USTR will confront, and assess some possible implications of the Section 301 remedies for existing contracts of various kinds.
