President Donald Trump is focusing on revitalizing the U.S. shipbuilding industry, which currently trails behind China in this sector. Recently, he signed an executive order aimed at strengthening American maritime capabilities.
On April 10, Trump’s executive order directed federal agencies to create a comprehensive Maritime Action Plan. It also calls for the U.S. trade representative to gather suggestions to counter China’s unfair practices in the shipbuilding market.
The order also includes plans for the government to assess how to provide more financial support to the shipbuilding industry. This could involve utilizing the Defense Production Act, the Department of Defense’s Office of Strategic Capital, and a new Maritime Security Trust Fund, among other initiatives.
However, Bryan Clark from the Hudson Institute warns that simply increasing funding to the industry may not be enough. In his view, the true challenge lies in generating higher demand for ships constructed in the U.S. “Just pouring money into shipbuilding, even with international help, won’t make us competitive with the heavily subsidized shipyards in China, Korea, or Japan,” he shared.
Moreover, experts believe that Trump’s initiatives work in tandem with the recently proposed SHIPS for America Act, which aims to enhance the U.S. shipbuilding industry and improve the Merchant Marine fleet’s resilience in wartime. One key aspect of the SHIPS Act is the establishment of a Strategic Commercial Fleet Program designed to build American ships that can operate internationally, and it aims to increase the U.S.-flagged fleet significantly within ten years.
“If we effectively implement both the executive order and the SHIPS Act together, we can provide incentives for U.S. shipbuilding and meet growing demands more efficiently,” Clark noted. While these measures may not allow the U.S. to outpace countries like China or Korea, they would contribute to a more robust shipbuilding sector domestically.
Currently, China dominates global shipbuilding, accounting for over 50% of the market, while the U.S. holds just 0.1%. Trump has also shown interest in international partnerships for shipbuilding, hinting at potential legislation to authorize the purchase of ships from other nations.
However, raising concerns, this may challenge the longstanding Jones Act. This law has been vital to the U.S. maritime industry, stipulating that only American-built ships can transport goods between U.S. ports, and requiring that a majority of the crew is American. Despite its importance for national security, many experts argue that the Jones Act has hindered fair competition within the shipbuilding sector and raised costs.
Efforts to repeal the law have struggled to gain traction in Congress, even with bipartisan support. Some experts assert that eliminating it could be a game-changer for U.S. shipbuilding. “Anyone serious about improving our shipping industry should consider addressing the Jones Act,” stated Veronique de Rugy from the Mercatus Center at George Mason University.
Colin Grabow from the Cato Institute acknowledged that while the Jones Act is a major issue, the shipbuilding challenges in the U.S. are complex. Nonetheless, he believes that without the restrictions of the Jones Act, the industry could thrive better.
As these discussions unfold, there is a growing consensus that both legislative and executive efforts are necessary to ensure the U.S. shipbuilding industry can compete effectively in the global market.
