Revitalising US shipbuilding: Congress needs to step up

Among the actions called for in the EO is the development of a Maritime Action Plan (MAP) that will be created by National Security Adviser Michael Waltz, in consultation with other relevant government agencies. Creating that MAP will not be easy.

Once proud shipbuilding groups such as Bethlehem Steel, Todd and Kaiser have long disappeared from the waterfront, the maritime industrial base has atrophied from neglect, and it has been decades since US shipyards built “a ship a day” as the President boasted in announcing the EO. The process will not happen overnight nor in four years, and it will require thoughtful planning and a steady flow of funding authorised by Congress to pull it off.

“The maritime industrial base has atrophied from neglect”

But that does not mean you throw in the towel and give up. The US needs only to look to its efforts during World War II, when American yards were building a ship a day.

Thousands of ships were launched by US shipbuilders to support the United States’ war effort. Notably, 2,710 Liberty Ships were built between 1941 and 1945. These “ugly ducklings”, as they were dubbed by President Franklin D. Roosevelt, were built to a standard, mass-produced design. The 250,000 components were prefabricated throughout the US in 250-ton sections and welded together in about 70 days, and one Liberty Ship cost US$2M to build, according to the American Merchant Marine at War.

Greece, which lost hundreds of ships during the war, acquired about 100 Liberty Ships after the conflict ended to rebuild its merchant fleet, reviving the country as a dominant player in global shipping.

One advantage that China has is a strong shipowning sector that naturally supports its domestic shipyards with a high volume of orders, points out BRS Shipbrokers. By contrast, US shipowners have not placed a high-volume of shipbuilding orders at US shipyards in years.

Furthermore, China provided US$132Bn on direct subsidies and state-backed financing for shipping and shipbuilding between 2010-2018, according to an analysis by Washington, DC-based bipartisan thinktank, Center for Strategic and International Studies.

An investigation by the US Trade Representative (USTR) into Chinese shipbuilding concluded that China’s “targeting the maritime, logistics, and shipbuilding sectors for dominance” were “unreasonable and burdens or restricts US commerce”. As a result, USTR proposed on 21 February imposing fees of US$1M or more on Chinese-built vessels calling at US ports, and implementing export carriage restrictions.

But hundreds of public comments to USTR’s proposed action have been largely unfavourable because of the negative and inflationary impacts on the American consumer, agricultural sector and industry, and the ships transport import and export cargo.

Rather than imposing port fees on Chinese-built ships and setting restrictions of cargo carriage, the US should look to develop an enduring maritime strategy that will spur investment in its shipbuilding facilities and revitalise its military and commercial fleets. Clearly, political backing for the effort exists, as shown by the bipartisan SHIPS for America Act, and the President’s EO. Now is the time for Congress to step up and collaborate with the administration on crafting a viable, forward-thinking, long-term plan and appropriate adequate funding to strengthen American shipbuilding, the maritime industrial base, and workforce training.