Heavy potential fees to be levied on fleets with Chinese-made vessels docking in United States ports could lead to economic disruptions for Bermuda, a shipping group has warned.

The Bermuda Container Line addressed concerns surrounding the Shipbuilding and Harbour Infrastructure for Prosperity and Security for America Act.

Its views on the implications of the Act were echoed by Michael Fahy, the Shadow Minister of Home Affairs, Housing and Municipalities.

The Government said that it was “fully engaged” on the proposal, with its Washington team holding “direct discussions with relevant agencies in the US capital”.

A Cabinet Office spokesman added: “That work has been augmented locally by a series of meetings including Government House, the US Consul-General, the Cabinet Office and the Ministry of National Security.

“This is a serious issue and the Government continues to liaise with the leadership of the container lines that stand to be impacted.

“Food security and an uninterrupted supply chain are critical to Bermuda, and the Government is working to ensure this is made clear to the relevant committee set to consider the issues later this month.”

The legislation, also known as the Ships Act, would impose a docking fee of as much as $1.5 million on a Chinese-built or Chinese-flagged vessel.

Richard E. Todd, the chief operating officer of Neptune Group Management, which runs the BCL, confirmed that the group held a Chinese-made ship, the MV Oleander.

He added that because the company’s small fleet brought in most of Bermuda’s goods, the Ships Act could have a heavy impact on goods imported from the US.

Mr Todd said: “Bermuda Container Line is aware of the Ships Act, which is designed to create a US national maritime strategy.

“The legislation is going through the commentary phase with the United States Trade Representative’s office.

“BCL is taking the proposed application of port fees on Chinese-built and non-US-built vessels very seriously and is communicating with all relevant agencies, including the USTR and local government officials, to monitor the situation while exploring all possible contingency plans to maintain service continuity.”

He added: “While the outcome of the Ships Act is unclear at this stage, any adoption of the proposed rules is likely to provide disruption to Bermuda’s economy, as approximately 90 per cent of all goods received in Bermuda arrive on the island’s three container ships, with BCL’s MV Oleander the largest of the three ships.”

The MV Oleander, the BCL’s newest ship, was built in China in 2019 and is a combination container and roll-on, roll-off vessel capable of carrying 456 20ft units.

She makes weekly trips between Bermuda and Port Elizabeth in New Jersey.

An article by the news agency Reuters said that the aim of the draft executive order was to increase US shipbuilding and undermine China’s power in the worldwide shipping industry.

The order further proposed tariffs on Chinese cargo-handling equipment.

It called for encouraging US allies and partners to put forward similar measures or risk retaliation.

The order was based on a proposal from the US Trade Representative’s office, which suggested putting fees of as much as $1.5 million on non-Chinese fleets with Chinese-built vessels.

It also suggested that vessels owned by Chinese operators face a port entrance fee of as much as $1 million per vessel.

The proposal, created on February 24, suggested that fleets with more than 50 per cent Chinese-made ships, regardless of which company operates them, would face entry fees of $1 million.

This fee, according to the proposal, should fall to $750,000 if the fleet was 50 per cent Chinese-made or less, then to $500,000 if the fleet was less than 25 per cent Chinese-made.

The draft executive order did not include this breakdown of fees nor did it explain how fees would be calculated.

Mr Fahy acknowledged the proposal and its potential effect on the island’s “already far too high” cost of living.

He said: “This would have a serious impact on freight costs and therefore all costs from bread to anything imported by ship from the US to Bermuda.

“I understand it could mean freight charges on each imported container could move from around $3,000 to an additional $10,000 or more.

“We have to presume the Bermuda Government is aware of such increases on costs to all Bermudians and Bermuda residents.

“What is the Government doing about this clear and present danger to our cost of living?

“Will this mean potential subsidies on freight? Are non-US ports being looked at, including Canada, Europe and UK?

“The people of Bermuda deserve to know.”

The Cabinet Office spokesman hit back, calling the Opposition’s statement “an unhelpful, amateurish descent into politicising an issue on which one would expect their support”.

Chinese shipbuilders produce more than half of all merchant cargo vessels used around the world each year.

This came after a staggering rise from its 5 per cent share of global ship production in 1999, according to the Centre for Strategic and International Studies.

By comparison, the US builds only five new ships every year, while at its peak in 1975 it produced 70.

It comes as addressing Chinese domination in the ship-making industry has built into a bipartisan priority in the US.

Outside of Bermuda, the operators of ships that carry bulk food, fuel and auto parts are expected to be affected by the proposed Act.

Container carriers such as the Swiss MSC and Danish Maersk are also expected to be affected, as well as China’s Cosco and Taiwan’s Evergreen Marine.