The United States Trade Representative must act quickly to counter this growing threat to America’s economic strength and defense readiness.
China’s exploitation of unfair, non-market policies and practices to advantage its shipbuilding, maritime and logistics industries has restricted United States commerce and warrants action under U.S. trade law, the Office of the U.S. Trade Representative (USTR) reported on Thursday.
“Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalization of U.S. industries, as well as the communities that rely on them,” Ambassador Katherine Tai said. “These findings under Section 301 set the stage for urgent action to invest in America and strengthen our supply chains.”
The report comes after the USTR launched a Section 301 investigation in April 2024, prompted by a petition from a coalition of five national labor unions, led by the United Steelworkers (USW).
“By targeting global maritime, shipbuilding and logistics sectors, the Chinese Communist Party has systematically – and publicly – worked to dominate this vital sector, leaving us increasingly dependent on the [People’s Republic of China] and its industries to meet our economic and national security needs,” USW International President David McCall said. “Now, we have the opportunity to turn the tide, create good, community-supporting jobs across the commercial shipbuilding supply chain and restore American maritime capacity and power.”
The Alliance for American Manufacturing (AAM) strongly supported the unions’ petition in a U.S. International Trade Commission hearing in May and testimony before the House Select Committee on the Chinese Communist Party (CCP) in June, calling for the USTR to put responsive measures in place as quickly as possible.
On Thursday, AAM President Scott Paul applauded the USTR for pursuing the investigation in a statement that cautioned that “failing to take decisive action will leave our shipbuilding capabilities at the mercy of Beijing’s persistent predatory market distortions.”
The Labor Caucus, which advocated for the USTR investigation as well, joined the call for swift response in a statement from Co-Chairs Reps. Debbie Dingell (D-Mich.), Donald Norcross (D- N.J.), Steven Horsford (D-Nev.), and Mark Pocan (D-Wis.) and Labor Caucus Members Reps. Rosa DeLauro (D-Conn.), Joe Courtney (D-Conn.), Jared Golden (D-Maine), and Val Hoyle (D-Ore.):
“It’s time for bold action to address China’s unfair practices and rebuild our shipbuilding industry — not only to create good-paying jobs but also to bolster our national security and supply chains. We urge the incoming Administration to heed the results of this investigation and to implement the strongest possible measures to level the playing field for American shipbuilding workers.”
For nearly three decades, China’s shipbuilding, maritime, and logistics sectors have benefitted from anti-competitive policies and deep subsidies designed to ensure their dominance in the global market, which they have soundly won. Meanwhile, massive excess capacity and artificially low prices have “effectively foreclosed” U.S. shipbuilders from future commercial opportunities, according to the USTR report.
The U.S. was once the world’s preeminent shipbuilder, employing more than 180,000 workers at its height in 1975 and producing more than 70 ships a year. Now, our nation produces fewer than five oceanic commercial vessels annually while China produces a gobsmacking 1,700 each year. This disparity has rightly caught the attention of our national security experts.
A leaked slide from a 2023 Office of Navy Intelligence briefing spotlighted that China’s shipbuilding capacity is 232 times greater than the United States. And, just this month, the Department of Defense added Chinese shipping conglomerate China Ocean Shipping Company (COSCO) to its list of “Chinese military companies,” in recognition of its ties to the People’s Republic of China’s (PRC) Military-Civil Fusion strategy.
The public, too, hears alarm bells ringing when it comes to this growing threat.
According to a poll AAM conducted with Morning Consult in December 2023, 82% of U.S. adults agreed that China’s dominance of global shipbuilding is concerning, while 76% said the use of Chinese-built drydocks to repair, maintain and retrofit U.S. Navy vessels is a threat to national security.
Likewise, 74% of those polled said they support U.S. government investment in the shipbuilding industry, with 72% citing national security as a reason to do so. And 81% agreed that it is important for the president to act to strengthen U.S. shipbuilding.
The USTR must continue to advance its Section 301 investigation and realize substantive solutions to push back against China’s anti-competitive practices in the shipbuilding, maritime and logistics sectors.