Shipping Company Faces Surprise $34 Million Tariff Bill
A shipping company has reported an unexpected annual tariff bill of $34 million, largely stemming from recent changes made by the Trump administration regarding cargo ship classification.
Atlantic Container Line (ACL), which focuses on transatlantic cargo shipping, cautioned that these elevated fees could lead to a halt in its U.S. operations.
The CEO of ACL, Andrew Abbott, expressed his disbelief, stating, “It was a head-shaking shock. I call it just shock,” during an interview.
Operating five vessels on U.S.-Europe routes, ACL has regular sailings throughout the year.
The Office of the United States Trade Representative (USTR) recently revised rules under Section 301, which addresses unfair trade practices, frequently targeting China.
The new regulations, effective from October 14, unexpectedly changed the classification of ACL’s ships.
Under the updated guidelines, vessels will incur Section 301 port fees on five occasions a year—once for each port call deemed taxable by the government.
Abbott mentioned, “We’re going to be billed $1.4 million a year for 25 ships. We believe the total tariff will be $34 million annually.”
ACL primarily transports containers—around 80% of its cargo—but also handles larger items like tractors and machinery (approximately 10%).
Due to their construction, the government categorizes ACL’s vessels as “vehicle carriers” or “roll-on/roll-off” ships instead of “container ships.” Abbott noted that only a small fraction, about 1%, of their cargo comprises passenger vehicles.
He described their vessels as “unique hybrids” combining features of both container and car carriers—something not seen elsewhere.
Abbott emphasized that ships should be classified based on the predominant type of cargo they carry, asserting, “That’s a container. We’ve always been considered a container ship. Now Customs and Border Protection has changed it to a Ro/Ro container.”
In a statement, USTR indicated that existing reporting mechanisms to Customs and Border Protection (CBP) will determine the applicability of service fees according to Section 301.
USTR clarified that the International Classification of Ships by Type (ICST) is based on structural features, not the specific cargo carried at any given moment.
Abbott remarked that while container ships originating from China are exempt from tariffs, the large “Ro/Ro” carriers can distribute costs across their fleets. “Even though our ships only have 1% cars, we still pay the full price,” he added.
He concluded with concern, saying, “We thought the USTR wanted to encourage people to stay in the United States rather than kick them out. But they’re just showing us the door.”
