
A U.S. investigation has found that China employs unfair strategies to dominate the global shipbuilding, logistics, and maritime sectors, sparking discussions about potential actions to address these practices. This conclusion stems from a months-long inquiry led by U.S. Trade Representative Katherine Tai, initiated in April 2024 following requests from several labor unions, including the United Steelworkers.
The investigation, conducted under Section 301 of the Trade Act of 1974, provides the U.S. with the authority to impose penalties on nations whose practices are deemed harmful to American commerce. According to sources familiar with the findings, China has implemented policies that include financial subsidies, forced technology transfers, intellectual property violations, and restrictive barriers for foreign firms. These measures have allowed China to secure a dominant position in the shipbuilding and maritime industries.
The report also accuses China of artificially suppressing labor costs within these sectors, further enhancing its competitive edge. Sources revealed that China’s share in the $150 billion global shipbuilding market has surged from 5% in 2000 to over 50% in 2023, supported by government subsidies. In contrast, U.S. shipbuilders now account for less than 1% of the market, a sharp decline from their previously prominent role. South Korea and Japan follow as key competitors in the industry.
The findings could pave the way for the U.S. to implement measures such as tariffs or port fees on Chinese-built vessels. While such steps would require a public comment period before implementation, the report serves as a tool for the incoming administration to address China’s dominance. President-elect Donald Trump has already expressed plans to increase tariffs on Chinese goods to 60% and has criticized China’s control over both commercial and military shipbuilding.
This investigation builds on years of efforts by the Biden administration to counterbalance China’s industrial influence. Actions included maintaining Trump-era tariffs, introducing new duties on electric vehicles, and imposing export controls on specific technologies. Additionally, last month, USTR launched a new inquiry into older Chinese-made semiconductors, signaling a continued focus on addressing China’s industrial policies.
Experts caution that revitalizing the U.S. shipbuilding and maritime sectors will require decades of investment and significant financial resources. While tariffs and other penalties may help level the playing field, broader strategies, including government incentives and partnerships, will be needed to rebuild the industry’s infrastructure.
Scott Paul, president of the American Alliance for Manufacturing, emphasized the urgency of taking action. “This process is essential to stopping the erosion of our shipbuilding base and fostering growth,” he said.
The U.S. shipbuilding industry has faced substantial decline, with only 20 operational shipyards remaining, down from over 300 in the early 1980s. Despite this, experts see growing demand for both military and civilian vessels, presenting an opportunity for renewal.
The report has received rare bipartisan support, highlighting the need to address China’s practices. Trump’s incoming national security adviser, Mike Waltz, has collaborated with Senator Mark Kelly to draft legislation aimed at revitalizing U.S. shipbuilding. Both have stressed the importance of reducing dependency on China, particularly for military capabilities.
While the challenges are immense, this investigation marks a step toward reshaping the U.S. shipbuilding industry and addressing vulnerabilities in a sector critical to national security and economic stability.
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