The following is the March 13, 2025, Congressional Research Service In Focus report, Section 301 and China: Shipping and Shipbuilding Issues.
From the report
In April 2024, USTR initiated an investigation into efforts by the People’s Republic of China (PRC or China) to dominate in the maritime, logistics, and shipbuilding sectors. It determined in January 2025 that such efforts were “unreasonable,” “burden or restrict” U.S. commerce, and were therefore “actionable” under Section 301.
With this finding, Section 301 requires USTR to negotiate with PRC officials to try to resolve U.S. concerns, and permits USTR to initiate U.S. countermeasures. In February 2025, the USTR proposed remedies for public comment (see “USTR’s Proposed Remedies”). Relatedly, media reports indicated the White House may be preparing to take actions to bolster the U.S. shipbuilding sector. This is the second Section 301 case involving China since 2018. In late 2024, the USTR initiated a third investigation on PRC semiconductor policies and practices.
Congress has considered ways to counter China’s role in global shipping, including whether to revitalize the U.S.-flag shipping and ship-building industries and related sectors (e.g., steel). Some Members say capacity shortfalls in these sectors affect the U.S. defense posture. Other Members have sought to restrict the use of PRC port cranes, counter China’s development of integrated maritime supply chains, and thwart PRC efforts to project maritime power globally through its One Belt, One Road (or Belt and Road Initiative). Congress enacted provisions in the FY2024 National Defense Authorization Act (P.L. 118-31) to prohibit the U.S. military from using any global port that uses the National Transportation and Logistics Public Information Platform (LOGINK), a PRC state-owned and controlled logistics data management platform. The act also bans federal funding for any port that uses LOGINK.
USTR’s Section 301 Investigation
While U.S. industry only represents 2.9% of world fleet ownership by capacity and 0.1% of global shipbuilding tonnage, USTR can use Section 301 to address the effects of PRC policies and practices on U.S. industry because of Congress’ actions in 1979. Congress amended Title III of the Trade Act of 1974 (P.L. 96-39) to address its concerns about the decline of the U.S. shipbuilding industry. The amendment allows USTR to invoke Section 301 because of the effects of PRC policies and practices on U.S. maritime trade. It made “actionable,” per Section 301, the use of subsidies by foreign governments to construct commercial oceangoing vessels that transport goods between the United States and other countries. The amendment is codified at 19 U.S.C. §2411(d)(2). In 2022, ships moved 44.6% of U.S. global goods trade by value ($2.3 trillion) and 78.6% of U.S global goods trade by weight (1.6 billion tons).
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