What Changed
Effective March 11, 2026The USTR initiated a new Section 301 investigation into Chinese maritime, logistics, and shipbuilding practices on March 11, 2026. The investigation focuses on whether Chinese government subsidies and practices give Chinese shipping companies and shipbuilders an unfair competitive advantage. If the investigation concludes with an affirmative finding, new Section 301 tariffs could be imposed on shipping fees for vessels built or owned by Chinese companies.
Who's Affected
US importers and exporters who use Chinese-flagged vessels or Chinese-built ships. Ocean freight costs could increase if tariffs are imposed on Chinese shipping fees. This could affect virtually all ocean-freight-dependent importers, as Chinese-built ships carry a significant share of global maritime trade.
Analysis
Section 301 Investigation Launched into Chinese Shipbuilding (effective 2026-03-11). The USTR initiated a new Section 301 investigation into Chinese maritime, logistics, and shipbuilding practices on March 11, 2026. Section 301 of the Trade Act of 1974 authorizes the USTR to investigate and respond to unfair trade practices by foreign governments, including subsidies and discriminatory policies that harm US commerce. The ongoing Section 301 action against China was initiated in 2018 and covers tens of billions of dollars in Chinese imports across four product lists. A four-year statutory review conducted in 2024 resulted in targeted increases on strategic sectors — electric vehicles, solar cells, batteries, semiconductors, and critical minerals — reflecting bipartisan consensus on the need to protect US competitiveness in clean energy and technology. Section 301 tariffs stack on top of the base MFN rate and, for certain products, on top of the Section 122 surcharge as well, creating compound tariff rates that can exceed 100% for some Chinese goods. The 2024 review confirmed that existing tariffs on Chinese goods will remain in force, providing businesses with certainty that Section 301 rates are not a temporary measure. USTR's approach of using "replacement rates" — where the 2024 increases replace the base list rates rather than stacking on top of them — is critical to understand when calculating effective tariff costs. For example, Chinese EVs face a 100% Section 301 rate that replaces the prior 25% rate; they do not face 125%.
Impact & Next Steps
Importers of Chinese goods should verify the specific List (1, 2, 3, or 4A) that applies to their HTS codes, as rates vary by list. The 2024 review replacement rates (EVs at 100%, solar at 50%) apply as final rates, not as additions to prior rates. Country-of-origin rules apply: products substantially transformed in China are subject to S301 even if shipped from a third country. Consider supply chain diversification for strategic categories to reduce S301 exposure.