COSCO Restrictions Could Raise New Costs for U.S. Agricultural Exports
New scrutiny of COSCO could raise freight costs and expose U.S. farmers and exporters to fresh supply chain risks as China trade tensions build.
U.S. scrutiny of Chinese shipping giant COSCO intensified on September 1 after American officials alleged that the state-owned carrier used concealed equipment aboard commercial vessels to collect intelligence for Beijing, allegations China has rejected. The case matters to U.S. agriculture because COSCO is deeply embedded in global shipping networks, and any escalation into new restrictions could affect vessel capacity, freight costs and the competitiveness of American farm exports. What began as a national security dispute is now carrying a potentially significant trade and logistics risk.
The immediate threat is not that COSCO suddenly stops moving U.S. agricultural products. The larger concern is whether security tensions revive regulatory measures affecting Chinese-owned, operated or built vessels calling at U.S. ports. For exporters of soybeans, corn, cotton, meat and specialty crops, higher freight rates or tighter shipping capacity can quickly become a margin problem. That risk becomes more important when U.S. commodities are competing for price-sensitive buyers against Brazil, Argentina and other major agricultural origins.
Shipping Costs Could Become a New Risk for U.S. Export Margins
The policy mechanism already has a precedent. In April 2025, the Office of the U.S. Trade Representative adopted Section 301 measures targeting China's dominance of the maritime, logistics and shipbuilding sectors. The original structure included fees on Chinese vessel owners and operators starting at $50 per net ton, while operators of certain Chinese-built vessels could face charges beginning at $18 per net ton or $120 per container, with scheduled increases in later years.
USTR included exemptions and implementation rules aimed at limiting disruption to U.S. exporters, including agricultural shippers. That was an acknowledgment of how quickly maritime policy can reach commodity markets. U.S. agriculture depends on moving enormous volumes at relatively narrow margins, and even modest increases in transportation costs can change the economics of a shipment. A few additional dollars per ton can matter when an overseas buyer is comparing U.S. soybeans, corn or other commodities with supplies available from competing origins.
Those measures are currently suspended. Following the U.S.-China economic agreement reached in November 2025, USTR suspended the maritime Section 301 actions for one year beginning November 10, 2025. That puts November 2026 back on the calendar as a potentially important deadline for agricultural trade. Without another agreement or a change in policy, the maritime dispute could return to the trade agenda just as the latest allegations involving COSCO add another national security issue to negotiations between Washington and Beijing.
The scale of U.S. agricultural trade makes changes in transportation costs particularly important. USDA Economic Research Service data show that the United States exported roughly $171 billion in agricultural products in 2025. China, once the leading destination for U.S. farm goods, fell to sixth place after American agricultural exports to the country dropped 66% from 2024 to about $8.4 billion. USDA linked much of that decline to reciprocal tariffs and weaker Chinese purchases of U.S. products, particularly soybeans.
Soybeans are among the commodities most exposed to another loss of competitiveness. When ocean transportation becomes more expensive, exporters have limited options: absorb the increase, pass it to overseas customers or reduce what they can pay further upstream. That creates a potential path from higher ocean freight to weaker export basis and lower bids at U.S. origin points. The actual impact would depend on vessel availability, shipping routes, exemptions and how quickly other carriers could replace capacity affected by any new restrictions.
Competition from South America makes that equation more significant. Brazil has become China's dominant soybean supplier and its export season increasingly overlaps with U.S. sales opportunities. If the cost of moving a ton of U.S. soybeans rises while competing freight economics remain more favorable, Chinese buyers have another reason to shift purchases toward Brazil. That pressure does not necessarily need to appear as a major move in Chicago futures. Part of the adjustment can take place through basis levels, export premiums and local cash bids.
Bulk agricultural exports received some protection under the original Section 301 framework. USTR provided an exemption for certain bulk commodities carried aboard vessels arriving in the United States empty. But American agricultural trade extends far beyond bulk grain. Cotton, refrigerated meat, dairy products, specialty crops and processed foods rely heavily on container availability, refrigerated equipment and dependable port schedules. Those supply chains could be more sensitive to carrier changes, equipment repositioning, delays and higher container freight rates.
Livestock markets also have indirect exposure. Beef, pork and poultry exports depend on reliable cold-chain transportation, while corn and soybean meal prices remain tied to international feed demand. The economic cost of a maritime dispute would not necessarily appear on a balance sheet as a specific "COSCO charge." It could surface through freight spreads, weaker export bids, reduced processor margins, slower overseas demand or changing basis levels across different U.S. production and export regions.
Washington also faces a broader strategic trade-off. USTR has argued that Chinese dominance in commercial shipbuilding and maritime logistics creates long-term risks for U.S. economic security and supply chain resilience. Reducing that dependence could support domestic shipbuilding and a more diversified maritime network. In the near term, however, replacing capacity provided by major Chinese carriers without increasing costs or disrupting trade is difficult, particularly for agriculture, where transportation efficiency can determine whether a commodity is competitive in an overseas market.
The next test comes in November, when the suspension of the maritime Section 301 measures reaches its scheduled end. If port fees return while scrutiny of COSCO is intensifying, Washington would be managing two objectives at once: reducing strategic dependence on Chinese shipping while trying to keep U.S. exports competitive. For agriculture, the outcome will ultimately be visible in freight rates, vessel availability, export premiums and the ability of U.S. commodities to compete for business in Asia and other global markets.
