US’s Proposed Fee on Chinese Shipbuilding Fails to Stop $2.6B Order to CSSC
China State Shipbuilding Corporation is reporting a giant new order for containerships valued at between $2.5 and $2.6 billion. While CSSC did not identify the customer, industry insiders widely believe it is from France’s CMA CGM Group following through on its earlier commitments and disregarding the U.S.’s threat to impose fees for Chinese-built ships.
The order is going to China’s Jiangnan Shipyard and calls for a dozen large 18,000 TEU containerships. The vessels will be fueled by LNG and incorporate the latest energy-saving technologies according to the filing from CSSC. The ships are due for delivery in 2028 and 2029.
CSSC highlights that this large agreement comes from a company that “has been a long-term partner.” The Chinese shipbuilder said it would be deepening its relationship with the customer. CMA CGM and Chairman Rodolphe Saadé participated in a 2023 trade mission between France and the EU to China. The group signed a commitment for orders valued at $3.1 billion, which was called the largest order for the Chinese state shipbuilder.
CMA CGM highlighted in the past that it has a long-standing relationship with the Chinese shipbuilding industry. The group said in 2023 that it had ordered more than 70 containerships to be built in China. The yards built the Jacques Saadé class which were the first large LNG-fueled containership ships and a new generation of 18,000 TEU vessels.
CMA CGM highlights that it currently has a fleet of over 650 vessels and carried over 23 million TEU in 2024. Alphaliner calculates the group has an additional 94 containerships on order with a combined capacity of approximately 1.5 million TEU while the group has a current capacity of approximately 3.9 million TEU.
Confirmation of this new order comes just days after the U.S. Trade Representative’s Office made follow-up recommendations on specific steps to take to stem China’s unfair policies designed to increase its domination in shipbuilding. In the last days of the Biden administration, the office found that China had policies that were subsidizing the industry against foreign competition.
The Trump administration has proposed a series of fees that would add to the operating costs of foreign companies that employ Chinese-built ships. Under the proposed actions, each U.S. port call for each vessel built in China, but operated by non-Chinese interests, could result in a fee of up to $1 million, depending on the proportion of Chinese-built ships in that operator's fleet. It also proposed an additional $1 million for each port call for operators who have newbuilds on order in China.
The Trade Office outlined several alternatives which are being reviewed by the White House on how to structure the fees on Chinese vessels. Most observers believe the Trump administration will proceed as it today, March 4, also moved forward with an additional 10 percent tariff on all Chinese imports, doubling the base rate, while some categories already had tariffs ranging from 25 percent to 50 percent or even 100 percent on Chinese EVs.
CSSC however highlighted the shipbuilding contract as a major export order. They noted the deal is denominated in U.S. dollars, while other recent deals were switched to the Chinese currency.