BEIJING — China's dominance in the global shipbuilding industry has sparked concerns in the United States, with the Asian nation now accounting for over 50% of the world's ship production. According to recent data, around 34% of all ships currently in operation were made in China, while a staggering 57.1% of ships under construction are being built in Chinese shipyards.
The significant gap in shipbuilding capacity between the two nations has prompted the U.S. to re-examine its relationship with China, particularly in the context of global trade and national security. Former President Donald Trump has vowed to "resurrect the American shipbuilding industry," including both commercial and military shipbuilding, as part of a broader effort to reset the U.S.-China relationship.
China's rise to prominence in the shipbuilding industry can be attributed to its vast steel and aluminum reserves, highly skilled and relatively cheap labor force, and strategic government support. The country's 10th five-year plan, introduced in the early 2000s, laid the foundation for China's shipbuilding industry, with the government providing significant subsidies and investments to drive growth.
In contrast, the U.S. shipbuilding industry has been in decline since the 1970s, with the country now producing only a fraction of the world's ships. The cost of building a container ship in the U.S. is estimated to be around $330 million, compared to just $55 million in China. Between 2020 and 2022, China produced over 4,000 new ships, while the U.S. built just 12.
The Trump administration's proposed solution to bridge the gap is to impose levies on Chinese-built, owned, and operated ships, with fees ranging from $1 million to $3.5 million per docking. However, industry experts have warned that such measures could lead to a "trade apocalypse," driving up freight rates and inflation, and diverting trade away from U.S. ports.
As the U.S. seeks to reassert its influence in the global shipbuilding industry, national security concerns are also at play. The country's dependence on Chinese-built ships to move goods has raised concerns about the potential risks to U.S. supply chains and the broader implications for global trade routes. With the U.S. producing only 0.01% of the world's commercial ships in 2024, the challenge ahead will be significant, and the outcome will have far-reaching consequences for the future of global trade and national security.
