Trump Signs Executive Order to Curb China’s Shipbuilding Supremacy

In a decisive move to revitalize the U.S. shipbuilding industry, President Donald Trump signed an executive order on Wednesday amid growing concerns about America’s maritime competitiveness against China. The order aims to address the significant disparity in ship production, with the U.S. lagging far behind its Asian counterpart. This initiative follows Trump’s plan to establish a dedicated office for shipbuilding within the National Security Council.

Addressing the Shipbuilding Gap

The executive order comes as the U.S. Trade Representative (USTR) continues to take action against China, which it accuses of unfairly dominating the maritime sector. Recent data highlights a staggering gap in ship production: the U.S. constructed only five commercial ships in 2022, while China built 1,794 and South Korea produced 734. This decline is stark compared to 1975, when the U.S. led the world with 70 ships built in a single year.

As of March 1, the U.S. accounted for a mere 0.4 percent of the total deadweight tonnage on the oceans, significantly trailing behind China (34.3 percent), South Korea (31 percent), and Japan (26 percent). This alarming trend has prompted bipartisan concern among U.S. lawmakers, especially in light of the ongoing trade war with China, which has led to reciprocal tariffs of 125 percent on imported goods.

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The executive order mandates the Department of Homeland Security to enforce harbor maintenance fees and prevent cargo carriers from bypassing these fees by rerouting goods through Mexico and Canada. Additionally, it establishes a maritime security trust fund to finance programs aimed at enhancing U.S. shipbuilding capacity, including potential revenue from tariffs and fees.

To further stimulate the industry, the order proposes incentives for private investment in the construction of commercial vessels and improvements to shipyard facilities. However, challenges remain, including a complex regulatory environment and a shortage of qualified mariners, as noted by Transportation Secretary Sean Duffy. He emphasized the need for more U.S.-flagged ships and the mariners to operate them.

Bipartisan Support for Shipbuilding Initiatives

Despite the challenges, there is a rare bipartisan consensus in Washington regarding the importance of revitalizing the shipbuilding sector. Senators Mark Kelly (D-Ariz.) and Todd Young (R-Ind.), along with Representatives John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), are set to reintroduce the SHIPS for America Act. This legislation aims to bolster national security while also impacting trade dynamics.

One key provision of the act requires that within 15 years, 10 percent of all cargo imported from China must be transported on U.S.-flagged vessels that are built and crewed in the United States. Lawmakers expressed that the executive order aligns with the goals of their proposed legislation, highlighting the urgent need to strengthen America’s maritime capabilities in the face of growing competition from China.

As the USTR continues to evaluate public feedback on proposed port-docking fees for Chinese ships, the outcome of these discussions is anticipated on April 17. The ongoing scrutiny of China’s shipbuilding practices underscores the complexities of international trade and the critical need for the U.S. to enhance its maritime industry.