The Future of US Shipbuilding: President Trump’s Plan to Revive American Industry

Speaking to the US Congress, President Donald Trump proposed a ‘sweeping’ plan to revive US shipbuilding, pledging renewed efforts to strengthen both military and commercial vessel production.

Framing the initiative as both an economic imperative and a national security priority, against the backdrop of the USA’s “once-thriving-now-withered” shipbuilding sector, President Trump vowed in his March 4, 2025 address to ‘counter China’s dominance’ in global vessel production by ramping up domestic manufacturing capabilities.

To this end, the US President announced the establishment of a brand-new Office of Shipbuilding in the White House and the introduction of special tax incentives for shipyards to ‘bring back’ manufacturing to US shores, “where it belongs”.

“We used to make so many ships. We don’t make them anymore, not very much. But we’re going to make them very fast, very soon,” President Donald Trump stated.

The recent announcement comes on the heels of the Office of the United States Trade Representative (USTR)’s measure aimed at curbing China’s influence and position in shipbuilding. Unveiled in late February 2025, the measure encompasses a fee of up to $1.5 million charged to Chinese-built vessels entering US ports.

The fees follow a petition filed back in March 2024 by ‘major’ labor unions, upon which the USTR conducted an investigation with the Biden Administration. The results suggested, according to the US government, that China’s dominance was “unreasonable” as well as “burdensome” to US commerce.

Concerning this, the USTR said in late January this year that China could be actionable under Section 301—an investigative tool under US trade law that allows the USTR to pursue unilateral trade retaliation.

Ambassador Katherine Tai, principal trade advisor, negotiator and spokesperson on United States trade policy, further highlighted that the USA ranked 19th in the world in commercial shipbuilding, with the capacity to produce less than 5 vessels per year, compared to China which constructs more than 1,700 units annually.

“In 1975, the United States ranked number one, and we were building more than 70 ships a year. Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalization of U.S. industries, as well as the communities that rely on them,” Tai argued.

China’s shipbuilding has, indeed, seen ‘exponential’ growth, with the nation’s market share said to have ballooned from 5% in 1999 to 50% in 2023. The Far Eastern country is also understood to control around 95% of shipping container production.

Furthermore, per maritime freight management solutions provider Veson Nautical, in 2024, Chinese shipowners splashed as much as $123 billion on newbuild orders. China Merchants Shipping and COSCO Shipping Lines ranked as the first and second on the Top 10 list, respectively.

The US maritime industry ‘pales’ in comparison. Unlike China, which has over 5,500 vessels flying under its flag, the United States can currently boast only around 80.

Recently, the United States government has made numerous efforts to alter this reality. In the first week of January this year, the US Department of Defense (DoD) added state-owned COSCO Shipping to its sanctions list, along with approximately 130 other firms described as “Chinese military companies”.

That said, neither the fees imposed on Chinese vessels nor the targeted sanctions can tackle one burning issue: the US-based shipyards’ inability to manufacture oceangoing vessels at scale. As understood, a rising demand for qualified seafarers is making the country’s position in the global shipping arena even more complex.

To bolster the national maritime industry, US lawmakers introduced the “New SHIPS for America Act” in late December 2024.

As explained, the bill was designed to rejuvenate the US Merchant Marine and ensure the country can transport critical goods and military cargo during times of conflict while fortifying domestic supply chains in peacetime.