New US fees on Chinese ships may drive demand for Canadian intermodal rail The other winner would be Canadian rail carriers and ports, as a lot of US-bound freight will attempt to divert to Prince Rupert and Vancouver and then rail into Chicago and other points east. Those ports are often congested as is, so they won’t be able to absorb much capacity.
— Ryan Petersen (@typesfast) February 24, 2025
Canadian ports like Vancouver and Prince Rupert, already key trans-Pacific gateways, are well-equipped to capitalize on this shift. With robust rail connections to the U.S. heartland via carriers like Canadian National and Canadian Pacific Kansas City, the ports could seamlessly handle increased traffic.
The fees’ impact is amplified by the prevalence of Chinese-built ships globally. Shipbroker Clarksons reports that 24,800 such vessels are currently in operation worldwide—more than from any other country. Even some U.S.-flagged ships were built in Chinese shipyards.
For container lines, the financial hit could be staggering. Petersen estimates an average container ship voyage generates about $15 million in revenue. With typical services making three U.S. port calls, fees could reach $4.5 million per voyage—nearly a third of revenue. Container lines are likely to pass these costs to U.S. importers, making shipping on Chinese-made vessels far pricier than on non-Chinese alternatives.
The proposal also introduces ambitious U.S. cargo preference rules, mandating that a growing percentage of U.S. exports be carried on American-flagged, and eventually American-built, vessels. This could push exporters to route cargo through Canadian ports to sidestep potential capacity shortages.
Though not yet finalized, the fees mark an aggressive escalation in U.S.-China trade tensions. For Canadian ports and intermodal operators, they present a potential windfall as supply chains adapt. U.S. importers and consumers, however, may face higher costs if the plan proceeds.
The USTR is accepting public comments on the proposal through March 24, with the final decision resting with President Trump. Given the risk of supply chain disruptions and rising consumer prices, the administration may face pressure to adjust or delay the plan. The proposed fees align with Trump’s tough-on-China stance, a key appeal to his political base.
As this unfolds, shippers and logistics providers must track developments closely and prepare contingencies. A significant redrawing of North American trade routes may loom, with Canadian railroads poised to emerge as winners.
