US president Donald Trump has signed a well-telegraphed executive order aimed at resuscitating American shipyards while also limiting China’s dominant influence on the sector.
Acknowledging the US’s less than 1% global shipbuilding market share yesterday, Trump said: “Rectifying these issues requires a comprehensive approach that includes securing consistent, predictable, and durable federal funding, making United States-flagged and built vessels commercially competitive in international commerce, rebuilding America’s maritime manufacturing capabilities, and expanding and strengthening the recruitment, training, and retention of the relevant workforce.”
Trump has given multiple parts of government – including the secretaries of state, defence, commerce, labour, transport and homeland security – a timeline to deliver ways to strengthen American shipbuilding.
Trump officials yesterday skirted around the specifics of contentious plans to charge Chinese tonnage extra for calling at US ports, something that has roiled the international shipping community in recent months, with the exact methodology of the fees to be laid out later.
In addition, yesterday’s executive order directs the US Trade Representative to consider imposing tariffs on ship cranes and other cargo handling equipment if they are manufactured, assembled, or contain components of Chinese origin, or if they are created by companies controlled by Chinese citizens.
The Department of Homeland Security is also tasked with imposing port maintenance fees and preventing carriers from circumventing these fees by using ports in Mexico and Canada and then transporting them overland to the US.
The order calls for the creation of a Maritime Security Trust Fund to provide sustainable funding for initiatives that strengthen US maritime capabilities. This includes using funds from tariffs, fines, fees, or tax revenues.
Lobby group, the Shipbuilders Council of America (SCA), lauded yesterday’s announcement from the White House, noting: “A strong US shipyard industry is essential not only for our economic security but also for our homeland and national security.”
As with many industries, China has come to dominate shipbuilding this century, moving from a global market share of less than 10% of the global orderbook to a commanding two-thirds stranglehold by the end of last year. Putting the scale of how far behind American shipbuilding is to its Asian rival, China manufactured more commercial vessels by tonnage in 2024 than US shipyards have built since the end of World War II.
Global Times, a state-run Chinese newspaper, lambasted the American plans last month in an OpEd, arguing: “The chasm between American and Chinese shipbuilding is fundamentally a gap in industrial infrastructure. The forces of globalization swept away America’s steel mills, machine shops and skilled labor force, leaving behind rusting supply chains and a hollowed-out manufacturing base. Shipbuilding, a quintessential heavy industry, requires a robust industrial foundation. When that foundation crumbles, shipbuilding inevitably follows.”
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