NASSAU, BAHAMAS- Tropical Shipping has warned that the proposed $1 million port fee on Chinese-built vessels could turn the Caribbean Basin into a new “Red River” dominated by Chinese carriers, while forcing the company to “double” its rates, with an average increase of $2,500 per 40′ container, a burden that could devastate both American exporters and Caribbean consumers.
Tropical Shipping President and CEO Tim Martin testified Monday before the U.S. Trade Representative (USTR) that the proposed tariffs would severely affect American-owned shipping companies as well as U.S. exporters and Caribbean businesses that ship with Tropical. The proposed tariffs include a flat $1 million port fee on Chinese-built vessels entering U.S. ports.
“The U.S. shipping industry serving the Caribbean cannot absorb the additional costs of the proposed port fees, which would have significant economic consequences,” Martin testified. “Instead of strengthening American competitiveness, these port fees would push American-owned carriers like Tropical out of business.”
Tropical Shipping, headquartered in Riviera Beach, Florida, operates out of the Port of Palm Beach, and nine of its 19 vessels were built in China up to 25 years ago. Martin asked the USTR to exempt American-owned and headquartered vessel operators from the proposed fees and to apply the tariffs to future ships built in China, but not on fleets already in service.
“I urge this committee to consider exemptions or policy adjustments that ensure American-owned shipping companies are not unfairly penalized for decisions made years before these tariffs, thereby ensuring a fair and equitable policy,” Martin testified.
Tropical transports about half of all goods imported to the Caribbean, Central, and South America – poultry, agricultural products, groceries, building materials, medicine, and hurricane relief supplies. The proposed fees would force Tropical Shipping to double its freight rates, causing its Caribbean customers to buy from outside the U.S. at a higher cost.
It was also noted that the proposed actions would also create a multiplier effect across the American shipping industry and the Caribbean, including American businesses that export to the Caribbean, the U.S. supply chain, and Caribbean counterparts and consumers buying the products Tropical ships. The average vessel serving the Caribbean region is 1,100 TEUs. If the fees in the proposed action are applied to these smaller vessels, Tropical would have to double its freight rates, with an average increase of $2,500 USD per 40′ container. An increase of this magnitude would be catastrophic for American exporters and Caribbean consumers.
In comparison, applying the proposed $1 million fee to a vessel that calls on a single U.S. port directly from China carrying 16,000 TEUs would increase the cost per 40′ container by only $125 USD.
Tropical is also warning that the unintended consequence of these fees would be that America’s third border, the Caribbean Basin, would become China’s new “Red River” – a trading route dominated by Chinese carriers and vessels transporting goods from China and other supply sources outside the United States.
Martin noted that Tropical Shipping has been an integral part of the Caribbean region for over 60 years, providing on-time, reliable shipping services and supporting the local community, with the company donating to education and youth development programs throughout the Caribbean, Central, and South America, contributing more than $500,000 USD in 2024 alone.
Tropical’s 19 vessels are built to serve shallow draft ports in the Caribbean, with nine vessels constructed in China between 8 and 25 years ago. Over this period, Tropical contends that it has had little to no practical opportunity to build new vessels in the U.S.
Unlike the 16,000 TEU capacity vessels used by most international carriers, Tropical’s fleet includes smaller vessels ranging from 150 to 1,100 TEUs.
