The U.S. shipbuilding industry has fallen on hard times. President Donald Trump wants to revive the sector, starting with new fees on Chinese-made container ships that carry a huge chunk of global trade. But reviving America’s nautical might will likely be difficult.
The proposed fees are meant to penalize Beijing for its “chokehold on the construction of commercial vessels,” said The Washington Post. Money charged to Chinese-made ships when they dock at U.S. ports would subsidize a “commercial shipbuilding industry that has fallen into disrepair.” But, like Trump’s other tariffs, the fees also “threaten the system of oceangoing trade” that moves goods around the world and could cause a “repeat of the supply chain disruptions” that frustrated American consumers during the pandemic.
Replacing China-made ships with new American models is “not like flipping a light switch,” said Reuters. American shipyards build “fewer than 10 ships annually” while their Chinese counterparts produce more than 1,000. Shipping industry executives say they would probably turn to Japan and Korea during the “years it would take U.S. shipyards to build up capacity,” but those countries would likely struggle to keep up. Trump’s plan, industry executives said, is likely to “backfire.”
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Bringing back shipbuilding capacity
“Will Trump make ships great again?” asked Rana Foroohar at the Financial Times. The president is certainly thinking big: His proposals would amount to the “biggest investment and commitment to U.S. maritime capabilities” since World War II, said Michael Wessel, a former member of the U.S.-China Commission that oversees trade issues for Congress. There are big challenges, though. While America “needs to bring back shipbuilding capacity” for both economic and national security reasons, Foroohar said, the U.S. will also need “help from allies like the Finns and Koreans to retrain workers” to build those ships.
Trade groups believe America is “not prepared to win an economic war against China-built containerships,” said CNBC. An estimated 98% of the global shipping fleet would be affected by the fees. Farmers would be hard hit: The Agriculture Transportation Coalition said there are no U.S.-built ships ready to carry American agricultural exports across the ocean. “If they were available at a reasonable cost, U.S. exporters, including agriculture, would already be using this option,” said Peter Friedmann, AgTC’s executive director.
‘Significant’ pain for consumers
“This entire enterprise is misguided,” said Colin Grabow at the libertarian think tank Cato Institute. China is not responsible for “U.S. maritime woes that long predate China’s rise as a shipping and shipbuilding power.” Beijing’s shipbuilders “would surely feel some pain” from the proposed fees, but the cost to American exporters and consumers “would be significant.”
There were a “handful” of proponents at a Monday hearing on the issue, said Bloomberg. Scott Paul, president of the Alliance for American Manufacturing, said the proposed fees would “help to restore American economic security, push back against China’s unfair trade practices, and revitalize shipbuilding in America.” Other commenters were skeptical. The fees “won’t work” to rebuild U.S. shipbuilding, said Joe Kramek, CEO of the World Shipping Council.
