US trade proposal could raise banana prices, warns Dole

USA – Dole, the leading banana supplier to the U.S., has warned that a proposed charge on Chinese ships could significantly impact fruit prices.

The U.S. Trade Representative’s Office (USTR) is considering fees of up to US$1.5 million for Chinese-built ships docking at U.S. ports. The plan aims to support domestic shipbuilding but may have unintended consequences for food imports.

Jared Gale, Dole’s chief legal officer, voiced concerns about the financial strain this policy could place on the fresh fruit industry. Speaking at a hearing on March 26, he stated, “The U.S. fresh fruit trade would be severely impacted by this proposed fee but so would the consumer.”

Bananas are transported using small, refrigerated vessels that frequently enter U.S. ports. Gale explained that because bananas are a low-margin product and cannot be grown domestically, any increase in shipping costs would quickly raise prices for consumers.

Dole operates its own fleet, and four of its ships were built in China, making them subject to the proposed fees.

Alejandra Castillo, CEO of the North American Export Grain Association, also weighed in on the issue.

She noted that it could take years for U.S. shipbuilders to develop a fleet capable of replacing Chinese-built vessels. In the meantime, exporters could face production cuts, leading to billions in potential losses.

Proposed policy details

The USTR’s proposal is part of a broader effort to limit Chinese influence in global shipping. Reuters reports that the agency’s investigation found that China increased its share of global shipbuilding tonnage from 5% in 1999 to more than 50% in 2023, aided by state subsidies.

Under the proposed rule, non-Chinese companies operating Chinese-built ships could pay up to US$1.5 million per port entry.

Operators with more than 50% of their fleet made in China would be charged $1 million per vessel, while those with smaller Chinese-built fleets would pay lower amounts.

A secondary set of fees would apply to companies that have ordered ships from Chinese yards for future delivery. However, refunds of up to US$1 million per entry would be available for U.S.-built ships used in international shipping.

The USTR has also proposed gradually increasing the share of U.S. exports that must be transported on American-flagged vessels, rising from 1% in the first year to 15% by year seven. Of this, at least 5% must be on U.S.-built vessels.

Industry experts say that while the policy intends to strengthen American shipbuilding, it could result in higher costs for businesses and consumers.

Linerlytica analysts estimate that about 17% of container ships entering U.S. ports are currently Chinese-made.

The Federal Register scheduled a public hearing on the matter for March 24, with discussions ongoing about the potential economic effects.

Many industry voices agree that while reducing reliance on China may be beneficial in the long run, the immediate impact could mean higher prices for everyday goods, including bananas.

The decision is yet to be finalized, but businesses and consumers alike are closely watching how it unfolds.

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