China announced it would charge special port fees on US-owned, operated, built or flagged vessels, but said Chinese-built ships would be exempt.

The United States and China on Tuesday began imposing reciprocal port fees on vessels linked to each other’s shipping industries, escalating a trade dispute that risks disrupting global freight and oil flows.

The move comes days after China expanded controls on rare earth exports and US President Donald Trump threatened to raise tariffs on Chinese goods to triple-digit levels. Analysts say the port levies, which target everything from container carriers to crude tankers, mark a new front in the trade war between the world’s two largest economies.

China announced it would charge special port fees on US-owned, operated, built or flagged vessels, but said Chinese-built ships would be exempt. According to state broadcaster CCTV, exemptions will also apply to empty ships entering Chinese shipyards for repair. The fees will be billed annually and collected at the first port of entry.

CBI News reports that the US had earlier unveiled its own port charges on China-linked vessels, citing Beijing’s “unfair policies” in global shipping and shipbuilding. A Biden-era investigation found China had used subsidies and trade practices to dominate the maritime sector, paving the way for Trump’s penalties.

Beijing also sanctioned five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, accusing them of helping Washington’s probe into Chinese practices. Shares in Hanwha Ocean fell nearly 6% on Tuesday following the announcement.

Market watchers warned that the measures could reshape global shipping. Analysts estimate up to 15% of the world’s oil tanker capacity, 13% of crude tankers, and 11% of container ships could be affected by the fees. China’s state-owned COSCO, one of the world’s largest container carriers, is expected to shoulder nearly half of the projected $3.2 billion costs by 2026.

In a statement, China’s commerce ministry urged Washington to reverse its actions. “If the US chooses confrontation, China will see it through to the end; if it chooses dialogue, China’s door remains open,” it said.

The tit-for-tat measures come as Trump also threatened to impose 100% tariffs on Chinese goods and introduce new export controls on critical software by November 1. His administration further warned that countries supporting a United Nations plan to curb shipping emissions could face sanctions or port bans — a move critics say blurs trade and environmental policy.

Despite the tensions, shares in Shanghai-listed COSCO rose more than 2% on Tuesday after the company announced plans to buy back up to 1.5 billion yuan ($210 million) worth of shares to support its value.