HONG KONG -- The tariff wars between the United States and China could further hit Hong Kong’s status as a major international container port, where fewer ships are docking and many workers are on reduced pay, according to an investigation by RFA’s Cantonese Service.
While the effects of the Trump administration’s latest tariffs may not yet have been fully felt, people working in the industry said business has been plummeting for some time, citing the increasing shift of international container traffic to ports in mainland China.
Recently increased U.S. tariffs now target goods made in China and Hong Kong equally, further reducing the city’s usefulness as a transshipment hub for Chinese manufacturers looking to evade tariffs by using a “made in Hong Kong” label.
The volume of shipped cargo arriving at Hong Kong’s container ports fell by 0.5% year-on-year to 111.1 million tonnes, according to figures released last week by Hong Kong’s Census and Statistics Department.
The city’s container terminals handled 13.69 million twenty-foot equivalent units, or TEUs, a year-on-year decrease of 5% from the year before.
Meanwhile, the number of vessels arriving under the Hong Kong flag has declined from a peak of around 3,000 before the pandemic to just 1,875 in 2024, a fall of more than 30%.
Staff on the ground said they have far less to do than just a couple of years ago, citing the shift of container traffic to ports in mainland China.
‘Very little to do’
A container truck owner-driver at Hong Kong’s Kwai Chung Container Terminal who gave only the surname Chan for fear of reprisals told RFA Cantonese that he has “very little to do” these days.
“I wouldn’t say it has fallen by 30% -- to me it seems as if it has fallen by 60 or 70%,” Chan said, interviewed from a parking lot at the container terminal on March 7.
He said part of the issue is that countries including the United States now no longer treat Hong Kong separately when it comes to tariffs, so Chinese manufacturers can no longer evade tariffs by shipping goods to Hong Kong and repackgaging them with a “made in Hong Kong” label.
Another driver who gave only the surname Leung for fear of reprisals said he once owned nearly 20 containers, but now only holds 6 or 7, due to the fall in the volume of traffic.
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He said he only works around 20 days a month now, compared with working nearly every day before the pandemic.
“There are fewer ships docking in Hong Kong now,” Leung said. “You can see where the crane arms are sticking up like trees -- that means there are no ships in dock. The arms are lowered when there are ships in dock.”
“We used to have transshipment business, where containers were shipped to mainland China after arriving here, but now they go direct to mainland China, so there’s nothing for us to do,” he said.
Hong Kong’s flag is the eighth most-flown by ships worldwide, according to VesselsValue, a subsidiary of maritime data group Veson Nautical.
‘Everything has been cut in half’
But in January, the number of newly registered ships described as ocean-going vessels fell by around 6.5%, compared with 2,173 in January 2022, suggesting a shift in emphasis to coastal and river cargo traffic.
Another driver, who gave only the surname Lui, said freight volumes, wages and the number of days he gets work are around half what they were four years ago.
“Everything has been cut in half, including wages,” Lui said. “At one point we were only shipping one container every couple of days ... Before, we used to have to work every day.”
Leung also estimated that business has fallen by 60-70%.
“There are fewer containers arriving in Hong Kong ... at least 70% less,” he said. “Back then, there weren’t so many ports in mainland China, so they came through Hong Kong, and we transported them [to China]. Now, they’re unloaded at mainland Chinese ports.”
The drivers' stories were backed up by Yu Kam-keung, consultant to Hong Kong Shipping Employees' Union.
“Put simply, if you want to know about container traffic in Hong Kong, it has been decreasing,” Yu told RFA Cantonese. “The shipping ecosystem has changed in a lot of ways, but I can’t comment much more than that right now, sorry.”
Some shipping companies are discreetly moving operations out of Hong Kong and taking vessels off its flag registry, Reuters reported on March 6, adding, “others are making contingency plans to do so.”
Hong Kong’s role in serving Chinese security interests and growing U.S. scrutiny of the importance of China’s commercial fleet in a future military conflict, possibly over Taiwan, are causing unease across the industry, the report said.
US faults China for restricting business
In a separate report, the agency cited a White House document as saying that the United States plans to levy fees on imports arriving on Chinese-made ships and boost its own shipbuilding industry in a bid to reduce China’s grip on the US$150 billion global ocean shipping industry.
The Office of the U.S. Trade Representative, or USTR, last month proposed imposing heavy port fees on China-owned shipping, which it said “burdens or restricts U.S. commerce by undercutting business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors.”
It said China’s share of the global shipbuilding industry has exploded. China accounted for about 5% of the total tonnage of ships manufactured in 1999. By 2023, that had surpassed 50%.
The investigation, conducted under Section 301 of the Trade Act of 1974, found that Beijing has pursued a policy of subsidizing its domestic shipbuilding industry to dominate the global market.
Translated by Luisetta Mudie. Edited by Malcolm Foster.