U.S. shipyards are floundering under the pressure of China’s coercive shipbuilding dominance, but the USTR is currently considering relief measures that could turn the tide.
The Alliance for American Manufacturing (AAM) joined several labor organizations and business groups as well as Members of Congress at a hearing on Monday organized by the United States Trade Representative (USTR) to express strong support for its proposed relief measures to counter China’s unfair practices and policies in the maritime, logistics and shipbuilding sectors.
The hearing follows USTR’s finding in January that Beijing has utilized unfair practices and policies to advantage these sectors and hinder their U.S. competitors.
Decades of economic damage have indeed taken their toll on the United States, with more than 70,000 jobs lost in the shipbuilding sector alone since the industry’s peak in the 1970’s. This economic harm extends beyond shipyards and throughout the shipbuilding supply chain and the communities that these manufacturers support. The damage China’s coercive shipbuilding dominance has also inflicted on our national security may be even more frightening.
An Office of Naval Intelligence briefing slide leaked in 2023 revealed that China’s shipbuilding capacity is 232 times greater than our own. Public data has aligned with this statistic as well. As AAM President Scott Paul noted in his testimony on Monday, “China’s shipyards secured a staggering 71 percent of global orders in 2024. In 2023, the United States produced fewer than ten oceanic commercial vessels, while China produced over 1,000.”
“China’s industrial policies both adversely disrupt steel markets on a global basis and, in sectors like shipbuilding, China’s dominance has succeeded in severely degrading the steel-intensive U.S. shipbuilding sector,” Cleveland-Cliffs Inc. Executive Vice President of Government Relations Patrick Bloom said. “These dynamics amount to a “one-two punch” directed at U.S. producers of steel plate for ships and adversely impacts countless other domestic industries in the shipbuilding supply chain.”
“The largest obstacles to shipbuilding in the United States are the unfair trade and economic practices of China,” Paul testified. “While no nation should be faulted for seeking to develop maritime capabilities, Beijing’s ambitions go well beyond that. China’s shipbuilding capacity has been turbocharged through a series of efforts aligned with Five-Year Plans dating back more than two decades.”
USTR has noted several proposed relief measures to fight back against China’s distorting force in the global shipbuilding market. These actions include:
A docking fee that would be imposed on Chinese operated and -built ships entering U.S. ports; restricting Chinese logistics platforms’ access to U.S. shipping data; requiring a growing percentage of U.S. exports to be transported by U.S.-flagged and -built ships over a seven-year timeline; and directing funds collected from docking fees toward revitalizing the U.S. shipbuilding sector and supply chain.
During Monday’s hearing, United Steelworkers International President Dave McCall lauded both the Biden and Trump administrations for acting in the interest of American workers by investigating Beijing’s practices in the shipbuilding sector and said that the proposed relief measures “will begin to rebalance the global market for the American shipbuilding sector and its existing thousands of workers across the economy” and “will lay a foundation for revitalizing our capacity in the critical sectors covered by our petition.”
Bloom emphasized that his company has existing steel production capacity to meet the demand for steel plate needed in shipbuilding should production increase up to three times the current U.S. volume.
Paul, meanwhile, urged the USTR to channel funds collected from docking fees into growing American shipbuilding capacity, boosting the U.S. shipbuilding supply chain, and dramatically scaling up workforce training.
Reps. Raja Krishnamoorthi (D-Ill.), Chris Deluzio (D-Pa.), Debbie Dingell (D-Mich.), Donald Norcross (D-N.J.), and Sen. Tammy Baldwin (D-Wis.) also testified before at the hearing, expressing their agreement with USTR’s finding that U.S. shipbuilding has been damaged by China’s economic manipulation.
In a rare moment of bipartisan agreement, the vast majority of Americans also support action to counter China’s near-total dominance of the global shipbuilding industry, with 72% of Americans agreeing that the United States cannot remain dependent on foreign manufacturers to build ships, new polling finds. Furthermore, more than two in three survey respondents (68%) agree that our nation’s ability to build ships for both commercial and military needs is a matter of national security.