A renewed push to revive US commercial shipbuilding is stirring debate, following the Biden administration’s decision—carried over from a Trump-era stance—to levy steep fines on Chinese-built and Chinese-owned vessels. Announced on April 17 by the Office of the United States Trade Representative (USTR), the policy aims to send a “demand signal for US-built ships,” according to USTR official Jamieson Greer.
The move has reignited a long-standing debate: Should the US seriously invest in scaling up its commercial shipbuilding industry? The question goes far beyond tariffs, touching on issues of national security, economic competitiveness, and industrial policy.
There has long been bipartisan support for maintaining at least a baseline shipbuilding capability in the US. The Jones Act—a century-old maritime law requiring goods shipped between US ports to be carried on US-built, US-flagged ships—has stood as a pillar of this belief. Despite vocal criticism over the years, the law has endured, bolstered by powerful seafaring unions and their political allies.
But the roots of US support for shipbuilding go even deeper, tracing back to World War II. The US built over 2,800 Liberty ships and thousands of other vessels during the war, a feat widely credited with helping secure Allied victory. That legacy continues to shape public sentiment—even if the industrial landscape has shifted dramatically since.
Despite its historic role, the US accounted for just 0.1% of global commercial shipbuilding output as of 2023. Only Jones Act requirements keep any large-scale production alive. Meanwhile, China has surged ahead, growing from less than 5% of global tonnage in 1999 to over 50% by 2023, according to USTR data.
That rise is a key factor in the recent US tariff action, which former President Trump described in March as a step toward “resurrecting the American shipbuilding industry.”
Historically, two arguments supported US shipbuilding: national defense and trade capacity.
During WWII, massive fleets were essential to transport millions of troops and equipment overseas. Today, however, military strategies and technologies have evolved. Conflicts now rely more on targeted deployments and asymmetric tactics, reducing the scale of logistics required.
The US military already has access to robust sealift capabilities through the Maritime Security Program, which includes 60 US-flagged vessels operated by foreign-owned carriers like Maersk and CMA CGM. The Navy’s Military Sealift Command operates an additional 125 civilian-crewed support ships.
As for exports, they are no longer a driving force in US shipbuilding. In the postwar era, ships like those from American Export Lines symbolized US export might. Now, China is building its own shipping fleets—like BYD’s car carriers—to support booming exports. In contrast, the US is reshoring high-tech manufacturing such as semiconductors, which are more likely to travel by air than sea.
The economic rationale for US shipbuilding is even more tenuous. Domestic ships are significantly more expensive to build. For example, Philly Shipyard charged $333 million for each of three 3,600-TEU ships built for Matson—about six times the cost of a similar vessel in an Asian shipyard.
According to the Cato Institute, the per-TEU cost of US-built container ships has risen by around $56,000 since 2002, compared to less than $7,000 for foreign-built ships. These cost gaps make it difficult for US shipyards to compete globally or even meet domestic commercial needs efficiently.
Given these realities, critics argue that the new tariffs are more symbolic than strategic. “The US shipbuilding sector already faces significant constraints, including a backlog of military orders and ongoing labor shortages,” said Joe Kramek, president and CEO of the World Shipping Council. “This action will raise prices for consumers, weaken US trade, and do little to revitalize the US maritime industry.”
With no clear military or economic rationale, the push to build more ships domestically may reflect a broader shift in US trade thinking—away from global supply chain optimization and toward economic nationalism. Whether that shift delivers long-term benefits remains to be seen.
Source: joc.com