U.S. Tariffs Create Uncertainty for Ship Leasing and Finance

 

As the U.S. considers a new wave of tariffs targeting Chinese-linked goods and services, Leigh Hansson, Global Regulatory Enforcement Partner at law firm Reed Smith, examines the growing regulatory uncertainty facing the global shipping industry.

The latest proposals from the U.S. Trade Representative (USTR) have raised concerns that vessels financed through Chinese leasing arrangements could be subject to additional port fees, even when ownership and control are commercially diverse.

One of the most pressing legal and operational questions now confronting the industry is what will qualify as “Chinese-owned” or “Chinese-controlled” under the new framework. While the latest USTR draft, published last week, has softened some of the more aggressive provisions found in earlier versions, it has not eliminated the core risk: that vessels with Chinese financing ties may be caught within the tariff scope.

This uncertainty is particularly acute for owners engaged in sale and leaseback transactions with Chinese financial institutions. For example, a Greek shipowner leasing a vessel from a Chinese lessor could see that vessel classified as “Chinese-controlled” — even if the commercial operations and technical management are handled elsewhere. In such cases, exposure to new tariffs or port charges could have material commercial consequences.

This ambiguity is prompting a wave of risk assessments across the sector. At Reed Smith, we are seeing heightened activity as clients seek to map their exposure in advance, rather than waiting for enforcement actions to materialize. Some are even considering restructuring their deals to reduce potential liability.

In parallel, we are seeing increased demand for contractual protections, adjusted insurance terms, and clearer disclosures around beneficial ownership and financing sources, to allow flexibility if tariffs come into force. Across the board, clients are looking for ways to future-proof their deals against regulatory surprises.

For now, the lack of a definitive legal definition of “Chinese ownership” leaves the industry operating in a regulatory grey zone. If the proposed tariffs are introduced as expected, they could force a re-evaluation of vessel financing structures globally — especially those that involve Chinese financial institutions or leasing companies.

 In the face of this uncertainty, the best course of action for shipowners is caution. Until regulators clarify the thresholds and triggers for enforcement, stakeholders should assume that any material Chinese involvement in a vessel’s ownership or financing structure could fall within scope. Staying ahead of the regulatory curve, through legal, financial, and operational planning, is essential for mitigating exposure in this evolving environment.

Leigh Hansson is a Global Regulatory Enforcement Partner at Reed Smith.