Blaming China for America’s economic woes has become a bipartisan habit, and shipbuilding is the latest target. In 2024, U.S. labor unions filed a Section 301 petition accusing China of using unfair subsidies to undermine American shipyards—a claim quickly endorsed by politicians across the aisle. Building on this momentum, President Trump introduced new port fees and export mandates aimed at revitalizing the domestic shipbuilding industry.
Yet this diagnosis misses the mark. The decline of U.S. shipyards predates China’s industrial ascent and is rooted in decades of protectionism, high labor costs, and resistance to innovation. Pointing fingers at Beijing not only distorts history but also distracts from the real sectoral issues. Far from reviving American shipbuilding, these measures risk inflating costs, hurting exporters, and weakening the broader economy’s reliance on affordable global shipping.
Trump’s Port Fees: A Costly Blow to U.S. Trade
In its final days, the Biden administration released a flawed Section 301 report that blamed China for the decline of the U.S. maritime industry. The report laid the groundwork for punitive trade measures—and handed the incoming Trump administration a political gift. Seizing the moment, Trump rolled out a populist policy: steep port fees on Chinese-built ships and vessels operated by Chinese companies.
The measures are sweeping in scope and steep in cost. The policy imposes fees starting at $50 per ton per U.S. voyage, rising $30 annually for three years. Even non-Chinese operators using Chinese-built ships aren’t spared, facing charges starting at $18 per ton or $120 per container, with annual hikes to follow. With Chinese container ships often carrying around 12,000 40-foot containers, a single trip could now face added fees totaling hundreds of thousands—or even millions—of dollars.
Furthermore, every car carrier docking at U.S. ports, regardless of ownership, will face a $150 fee per vehicle slot. For the largest ships, this translates into over $1 million in extra costs per visit. These fees do not just affect ship operators; they directly burden American exporters such as John Deere, General Motors, Mercedes, and Toyota, who rely heavily on these vessels to transport U.S.-made vehicles abroad.
At the heart of this approach lies a deeply flawed assumption: that punitive port fees can somehow rewire the architecture of global supply chains. But maritime shipping is inherently international, with China firmly at the center, accounting for more than half of global shipbuilding output. As of 2024, Chinese shipyards accounted for over 70% of new container ship orders and nearly 30% of vessels in active service by container capacity. COSCO/OOCL, China’s state-backed carrier, handled almost 12% of U.S. container imports in 2023 alone. And it’s not just Chinese carriers. Major global shipping lines—responsible for 81% of U.S. imports—also operate Chinese-built ships and have more on order.
If just 30% of the 57,000 cargo ship visits to U.S. ports are affected, the plan could impose over $11 billion annually in costs. These costs won’t stay at the ports—they’ll ripple through the U.S. economy, hitting U.S. exporters, importers, and ultimately consumers. From electronics and clothing to agriculture and autos, nearly every sector will feel the impact.
Worse still, major shipping lines warn they may cut service to smaller U.S. ports, putting jobs at risk in the very regions Trump claims to defend—dockworkers, truckers, and local businesses could all pay the price.
Why Trump’s Maritime Mandate Is Doomed to Fail
Trump’s plan doesn’t stop at port fees—it mandates thatup to 15% of U.S. exports be shipped on U.S.-built, U.S.-flagged, and U.S.-operated vessels in the coming years. It’s effectively an international version of the Jones Act, a century-old protectionist law blamed for raising consumers’ costs, hurting places like Puerto Rico and Hawaii, and stifling innovation within the maritime sector. Expanding it to global trade would only compound the damage.
But the harsh reality is that the ships this mandate demands don’t exist—and won’t anytime soon. U.S. shipyards build only a few commercial vessels annually and haven’t made specialized ships like liquefied natural gas (LNG) tankers in over 40 years—a process that takes at least four to five years. Moreover, many U.S. shipyards rely almost entirely on the Navy for business, and are already grappling with production delays, labor shortages, and soaring costs.
But shipbuilding capacity is only part of the challenge. The economics of constructing and operating a U.S.-flagged fleet are simply prohibitive. A Jones Act–compliant product tanker can cost as much as $250 million—five times more than a comparable foreign-built vessel priced around $52 million. Operating costs are similarly steep: over $11 million annually for a U.S.-flagged ship, compared to just $2.6 million for a foreign-flagged one. And since many of these vessels would return home empty or underloaded after dropping off exports, American exporters would be left footing the bill, further eroding their global competitiveness.
The narrative that pins the collapse of U.S. shipbuilding on China is not just misleading—it’s a distraction. The industry’s decline is rooted in decades of domestic policy failures: high costs, overregulation, protectionism, and a failure to modernize. American shipyards began their descent long before China became a dominant player. While Chinese subsidies do make ships roughly 20% cheaper, the stark reality is that U.S.-built ships are still about 300% more expensive, indicating that subsidies aren’t the primary issue. Even without them, U.S. yards would remain uncompetitive.
If the goal is to rebuild America’s maritime strength, policymakers must confront the real barriers: burdensome regulation, inflexible labor practices, protectionist policies, and crumbling industrial infrastructure. History makes one thing clear—protectionism has failed to revive U.S. shipbuilding before, and repeating those same mistakes now will only deepen the industry’s deterioration.
Photo by Yunsik Noh
