The President of the United States, Donald Trump, is working on establishing a new executive office and enacting related regulations to promote the development of the domestic shipbuilding industry in the face of China’s expansion in this field.
The Office of Shipbuilding in the United States will be responsible for coordinating various actions to support the struggling domestic shipbuilding industry. Simultaneously, the U.S. government will impose hefty fees on Chinese-made ships operating commercially.
During a speech to Congress on March 4th, Trump stated, “In order to strengthen our industrial base, we will revitalize America’s shipbuilding industry, including commercial and military shipbuilding.” He added that tax incentives will be implemented to foster the growth of the domestic shipbuilding industry.
The financial investment from the French shipping giant, CMA CGM, has already provided support for the Trump administration’s efforts. The company’s leadership recently announced a $20-billion investment to help construct shipping logistics facilities and harbor docks in the United States.
CMA CGM CEO Rodolphe Saade met with Trump in the Oval Office of the White House. He stated that this investment would create ten thousand job opportunities, including expanding container docks and establishing an air freight hub in Chicago.
According to Reuters, it is expected that Trump will sign an executive order in the coming weeks to levy high fees on companies docking Chinese-made ships at U.S. ports.
While this move may generate significant revenue, given the current global reliance on Chinese manufacturers for commercial vessels and cargo containers, it may also hinder business development.
The draft of the executive order indicates that any ship entering U.S. ports, regardless of where it was manufactured or which country’s flag it flies, will be subject to fees if it belongs to a fleet that includes ships made in China or flying the Chinese flag.
English Epoch Times has contacted the White House for further details.
It remains unclear how much support this executive order will garner as it involves fees, and widespread implementation of such fines may face some obstacles.
The World Shipping Council, a major trade association for international shipping, expressed concerns that these fees could affect nearly all ships docking at U.S. ports, potentially burdening American consumers with up to $30 billion in annual costs and doubling transportation expenses for U.S. export goods.
Information cited from a press release from the Office of the U.S. Trade Representative on February 21, 2025, titled “Recommendations for Action on Section 301 Investigation Targeting China’s Ambitions to Dominate Shipping, Logistics, and Shipbuilding Industries.”
The U.S. government views strengthening the domestic and allied shipbuilding industries as a top priority, as China has rapidly taken over much of the world’s shipbuilding business in recent decades, gaining significant economic and military advantages.
Over the past 50 years, as commercial enterprises sought faster and cheaper shipbuilders to meet the immense demands of global trade, the U.S. domestic shipbuilding industry has been on the brink of collapse.
According to a report by McKinsey & Company in 2024, the U.S. ship production has plummeted by over 85% since the 1950s, with the number of U.S. shipyards capable of constructing large vessels decreasing by more than 80%.
Currently, U.S.-built ocean-going merchant ships account for only 0.1% to 0.2% of the global tonnage.
The decline in the overall shipbuilding capacity of the United States has severely disrupted its military supply chain, creating significant bottlenecks.
A report by the Congressional Research Service in 2023 highlighted that shortages of skilled labor, lack of production facilities, and exploitative contract practices have led to years-long delays in the development of the U.S. Navy, hindering the expansion of American surface combat capabilities.
In 2016, the U.S. Navy formulated a plan to increase the number of warships to 355 by 2030, which was later raised to 381 ships in 2023.
However, since 2003, the number of U.S. naval warships has remained between 270 and 300.
A report from the Government Accountability Office released this month stated, “Navy shipbuilding procurement practices have consistently resulted in cost overruns, delivery delays, and ships performing below expectations.”
“The cost overruns for Navy ships have been in the billions of dollars over the planned budget, extended construction times by several years, often with quality and performance falling short of expectations.”
This poor performance is largely a result of the greater challenges facing the national shipbuilding industry.
Currently, the United States has only nine shipyards producing naval vessels, each typically focusing on a specific type of warship, with each facing issues such as limited space, aging equipment, and labor shortages.
The estimated delay for constructing Virginia-class attack submarines and Constellation-class frigates is three years.
Even basic amphibious vessels often experience delays of up to a year in production.
Lack of the ability to adopt advanced ship design methodologies used by other global commercial developers has resulted in significant wastage.
According to a 2024 report by the Government Accountability Office, at one time, the U.S. spent $1.84 billion on maintenance and modernization upgrades for four cruisers, which were retired without deployment after undergoing upgrade refurbishments.
It remains uncertain whether the efforts by the Trump administration to support the shipbuilding industry will address these issues or help the Navy boost its surface combat capabilities on track, as the current number of U.S. ships is still below 300.
China has greatly benefited from the U.S. withdrawal from shipbuilding, gaining vast commercial and military advantages through its expansion efforts in this sector.
Currently, China produces over 53% of the world’s commercial vessels and 85% of maritime containers.
In just 2024, the tonnage of merchant ships built by a Chinese state-owned shipbuilding enterprise surpassed the total tonnage of ships built by the U.S. shipbuilding industry in the 80 years since the end of World War II.
This company, China Shipbuilding Group Limited (CSSC), has been sanctioned by the United States for its essential role in constructing warships for the Chinese military.
The Center for Strategic and International Studies (CSIS) considers CSSC’s massive shipbuilding scale as a significant example of China’s “civil-military fusion” strategy, aimed at eliminating barriers between commercial and defense sectors within China.
In essence, there are 35 shipyards in China either producing military vessels or owned by CSSC with military connections, alongside 272 shipyards either state-owned or under political control of the Chinese Communist Party (CCP).
The fusion of China’s military and commercial entities has formed a global shipbuilding entity, effectively subsidizing China’s military development by selling ships to countries worldwide.
According to a report from the Center for Strategic and International Studies, over 75% of ships produced by Chinese shipyards related to the military are built for companies outside of China and Hong Kong, including military allies of the United States like Denmark, France, Greece, Japan, and South Korea, and other partners like Qatar, Singapore, Switzerland, and Taiwan.
The report states, “These foreign companies have thus funneled billions of dollars to Chinese shipyards that also build warships, driving modernization of the Chinese navy and providing crucial dual-use technology to Chinese defense contractors.”
“The weakening of U.S. and allied shipbuilding capabilities poses an urgent threat to military readiness, reduces economic opportunities, and fuels the ambitions of China’s global power projection.”
Leveraging its capital and vast shipbuilding industry under its control, China’s military strength in warships surpassed that of the U.S. Navy in terms of total vessel numbers between 2014 and 2016. Currently, China plans to deploy a fleet of 425 ships by 2030, while the U.S. struggles to achieve its target of 355 ships.
The measures by the Trump administration to revitalize the domestic shipbuilding industry in the U.S. may partially offset China’s strategic advantage.
It may also require the U.S. to encourage the development of shipbuilding industries in its main shipbuilding allies, Japan and South Korea, the second and third-largest shipbuilding nations worldwide after China.
The report by the Center for Strategic and International Studies suggests, “Over the long term, the United States needs to invest in expanding shipbuilding capacity outside of China by rebuilding U.S. industry and leveraging existing advantages with like-minded nations.”
Original Article:
Trump Seeks to Boost US Shipbuilding Amid China’s Dominance
Published in English Epoch Times.