Decades of erosion in the U.S. shipbuilding industry will take time to reverse, but U.S. manufacturers have a shot at recovery now.
On April 17, the Office of the United States Trade Representative (USTR) announced a series of actions targeting China’s unfair and anti-competitive non-market practices in the global maritime supply chain. The agency will phase in escalating fees on Chinese-built vessels and foreign-built car carrier vessels.
The USTR’s measures will occur in two phases, with the first beginning Oct. 14. In the first phase, the USTR will set fees on vessels with Chinese operators or owners that will increase incrementally from $50 per net ton of the arriving vessel to $140 per net ton over a period of three years. During the same period, fees on Chinese-built vessels will be based on net tonnage or containers, starting at $18 per net ton of the arriving vessel and increasing to $33 per net ton over three years.
“Ships and shipping are vital to American economic security and the free flow of commerce,” said USTR Jamieson Greer. “The Trump administration’s actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.”
The USTR’s measures were triggered by a Section 301 investigation petitioned for by the United Steelworkers (USW), alongside the International Association of Machinists and Aerospace Workers, the International Brotherhood of Boilermakers, the International Brotherhood of Electrical Workers, and the Maritime Trades Department, and the AFL-CIO, on March 12, 2024.
USW International President David McCall praised the action:
“The USTR’s thorough investigation validated our charges, and today’s announcement lays out a series of strong steps to restore U.S. shipbuilding capacity. Coupled with a recent Executive Order on shipbuilding, the USTR’s measures expand the arsenal to combat China’s policies.
“It will clearly take a concerted effort and ongoing commitment to revitalize our capacity, strengthen our supply chains, launch vessels and ensure workers have the needed training to build and crew American-made ships. We will also need to consistently monitor our progress and adjust fees, sanctions and other trade remedies as needed.
“This yearlong process now spans two administrations, and we look forward to continuing to work with both our trade representative and Congress to ensure a bipartisan, durable approach to revitalize American shipbuilding capacity.”
Alliance for American Manufacturing President Scott Paul also lauded the agency. “These measures, coupled with strategic investments in our maritime supply chains and workforce, open new opportunities to revitalize a critically important sector,” Paul said. “We look forward to working with the administration and bipartisan supporters in Congress to make sure that this effort is a success.”
These measures build on President Trump’s “Restoring America’s Maritime Dominance” executive order (EO) on April 9, which called for the creation of a Maritime Action Plan (MAP) that assesses how to use available authorities and resources to invest in and expand the maritime industrial base as well as identify components in the maritime supply chain that are essential to its growth.
Additionally, in his April 9 EO, Trump directed the USTR to propose tariffs on ship-to-shore cranes and other cargo handling equipment manufactured, assembled, or made using components of Chinese origin, “or manufactured anywhere in the world by a company owned, controlled, or substantially influenced by a [People’s Republic of China] national.” The USTR launched the comment period for these tariffs on April 17.