The Trump administration is tacking on new, costly fees to special, foreign-made ships that transport cars in and out of American ports.
Hundreds of thousands of vehicles a year are imported and exported on ships that resemble floating parking garages. These carriers, known as roll-on, roll-off vessels, or ro-ros, are primarily manufactured in China, Japan and South Korea. Some can hold up to 9,000 vehicles.
The administration wants to revive shipbuilding in the United States and dent China’s position as the world’s dominant shipbuilder. To do that, it introduced rules this year that require Chinese-built and Chinese-owned ships to pay high fees when they visit U.S. ports.
However, the rules go much further with ro-ros, forcing all foreign-built vehicle carriers to pay the fees, not just those built in China, regardless of whether they’re bringing vehicles into the country or shipping them out.
The companies that operate and use the carriers say the rules will burden them with new costs and add as much as $300 to the price of a car. They also say they are confused by the stricter approach for such an essential part of the supply chain.
“We don’t have a crystal ball into why that arrived, or why ro-ros were focused on to any extent at all,” said Mark Vlaun, the vice president of government relations at American Roll-On Roll-Off Carrier, a vehicle carrier operator.
The federal agency that wrote the rules, the Office of the United States Trade Representative, started an investigation during the Biden administration that sought to address China’s dominance of commercial shipbuilding. The rules for ro-ros appear intended to encourage the building of such vessels in the United States before other types of ships, like tankers.
The office, led by Jamieson Greer, a trade lawyer, did not respond to questions about its rules for vehicle carriers.
Some shipping analysts said American shipyards weren’t up to the task of building ro-ros, which are more challenging to manufacture because, among other things, they have movable decks and lack the walls that divide ships into watertight sections.
“With all of the added cost and difficulty of building these vessels, I am left wondering if even a single one will be built as a result of the U.S.T.R. action,” said Colin Grabow, an associate director at the Cato Institute, a research organization that favors less government regulation of business.
Since nearly all ro-ros visiting American ports were made overseas, car and machinery manufacturers have no way of avoiding the fees.
“A significant number of the vessels that are out there in use right now come from Japan and Korea,” said Jennifer Safavian, the chief executive of Autos Drive America, which represents foreign automakers with operations in the United States. “We would have liked to have seen some exception for that.”
Ms. Safavian said the fees could add as much as $300 to the cost of a vehicle. “And that’s on top of all the other increased costs that the auto industry is seeing because of all the tariff activity,” she said.
Last week, the trade representative signaled that it intended to soften the ro-ro rules, in response to industry pushback. It proposed an apparent exemption for ro-ros that are part of the United States’ Maritime Security Program, a fleet of commercial ships used to support military operations. Mr. Vlaun, the ro-ro executive, said he supported such a move.
The trade representative also proposed a change to the ro-ro fees: basing them on a ship’s volume and not how many vehicles it can carry, which would reduce how much operators paid in fees.
The ro-ro industry has reason to hope the agency goes further and applies the fees exclusively to Chinese vessels. It recently loosened the provisions for vessels that transport liquefied natural gas, a valuable American export.
After opposition from the oil and gas industry, the agency indicated that it wouldn’t suspend the export licenses of ship operators that didn’t eventually switch to American-made liquefied natural gas carriers. The United States has not built such a vessel in more than 40 years.
If the trade representative maintains its policy of penalizing all foreign made ro-ros, the demand for American vessels will increase. Yet U.S.-made ships are much more expensive than foreign ones. Congress aims to address that by passing a bipartisan bill that would provide significant subsidies to support the building and use of U.S. ships. The bill was introduced in April.
But while Mr. Vlaun applauds the efforts to revitalize American shipbuilding, he said it would be easier to build other types of vessels before ro-ros. Vehicle carriers, he said, are more challenging to manufacture.
“If you were going to start a massive shipbuilding program, ro-ros are probably not the place you want to do first,” Mr. Vlaun said.
Rebecca Elliott contributed reporting.
Peter Eavis reports on the business of moving stuff around the world.
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