4 Strategic Maneuvers by Chinese Banks to Avoid US Tariffs: From Lease to Ship Mortgage?

Jakarta, Pintu News – Trade tensions between the United States and China continue to spill over into the global maritime sector. Most recently, a number of major Chinese banks are reportedly considering an unorthodox financial strategy: converting ship charter contracts into mortgage-based loans. This move is being taken to mitigate the impact of US-imposed port tariffs on ships made or operated by China from October 2025.

1. Chinese Banks Eye Mortgage Scheme to Replace Ship Charter

Reported by Cryptopolitan on September 26, 2025, the leasing units of at least two state-owned banks are in discussions with the National Financial Supervisory Authority (NFRA) to change their funding model from leasing to mortgages. This model was previously deemed too risky by regulators due to the high volatility of vessel values.

In a leasing contract, the bank buys the vessel and leases it to the operator. But in a mortgage scheme, the ownership is in the hands of the operator, while the bank only acts as a lender. This means more market risk is borne by the operator and lender, rather than the asset owner.

The move marks a significant shift in the global ship financing model, where Chinese banks have replaced Western banks in the past decade.

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2. Tug of War with Regulators: Between Protection and New Risks

The NFRA has yet to make an official decision. The regulator is weighing the systemic impact of such a move, especially in the context of domestic economic pressures such as a weakening property market and slowing growth.

On the other hand, the Chinese government faces a strategic dilemma. Protecting banks and shipping companies from US tariffs is politically important, but opening banking access to maritime sector risks could also exacerbate financial instability in the event of mass defaults.

With around $100 billion of vessel assets now funded by leasing held by Chinese companies, this change in financing scheme not only has a local impact, but also changes the funding map of the global shipping industry.

3. US Tariffs Trigger Tactical Action

The US plan announced by President Donald Trump in April 2025 sets new tariffs based on the cargo volume of ships built and/or operated by Chinese companies. The policy took effect October 14, 2025 and is aimed at reviving the US domestic shipbuilding industry.

Washington claims that these tariffs are intended to reduce dependence on China’s maritime dominance. But in Beijing’s eyes, this policy is seen as a direct challenge to China’s dominance in global shipping finance.

In response, some Chinese shipowners have begun raising charter rates for vessels not calling at US ports, or seeking funding from non-Chinese banks to reduce exposure.

4. Domino Effect in the Global Maritime Industry

The impact of this change is potentially significant. With shipping accounting for around 40% of the portfolios of some of the major leasing institutions in China, the change to a mortgage financing structure could shake up the ship financing ecosystem internationally.

According to Clarkson Research Services data, Chinese leasing companies hold a dominant share of ship financing globally. If the mortgage model is widely adopted, it could inspire or force other financial institutions to follow a similar approach – either to avoid exposure to US policies or to respond to the changing dynamics of the maritime market.

Conclusion

The conversion of leasing schemes into ship mortgages by major Chinese banks is a strategic response to renewed geopolitical pressure from the United States. But this decision is not without risk. Amid global uncertainty and domestic economic pressures, the move could be a balancing act between national protection and financial sustainability. Whatever the outcome, these changes will shape the global shipping finance landscape in the next few years.

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Reference:

• Nellius Irene / Cryptopolitan. China banks mull ship mortgages to dodge US levies. Accessed September 26, 2025