Tensions rise as the US tackles China's shipbuilding dominance
The USA is ramping up its actions against China's dominance in the shipbuilding industry. Authorities plan to impose fees of up to $1.5 million on Chinese ships docking at American ports. According to CNBC, Congress is also considering the SHIPS for America Act to rebuild the national shipbuilding sector and reduce dependence on Beijing.
The Trump administration intends to significantly limit the presence of Chinese ships in American ports. Under the new policy, carriers using Chinese vessels may be subjected to fees of up to $1.5 million per ship. This is part of a broader strategy aimed at reducing China's dominance in the shipbuilding industry and rebuilding American ship production, reports CNBC.
In 2024, China accounted for 81% of the global container ship market, and its share in the bulk carrier sector was 75%. Beijing's share in LPG transport increased to 48%, and in the LNG segment, it rose to 38%.
New regulations and potential impacts on the industry
The USA will introduce special fees on ships built in China that dock at American ports:
- Chinese operators (e.g., COSCO) will pay up to $1 million per ship.
- Carriers with Chinese vessels in their fleet may be charged up to $1.5 million per ship.
According to the USTR report, additional restrictions might apply to companies with more than 50% of their ship orders placed in China. This could mean imposing additional fees on them, as stated in the report.
Soren Toft, CEO of MSC, the world's largest ocean carrier, warns that new regulations could increase global freight costs by $20 billion and raise container fees by $600-800. Carriers may reduce calls to the USA, shifting transshipments to other ports.
Plan to rebuild the American shipbuilding industry
In response to China's dominance in shipbuilding, a bipartisan initiative, the SHIPS for America Act, has emerged in Congress. The project includes:
- Tax incentives and subsidies for American shipyards.
- Increasing the number of USA-flagged ships, with a goal of 250 vessels.
- Requiring a portion of US exports to be carried on American ships, starting from 1% annually and gradually increasing to 15%.
Currently, the USA has fewer than 100 ocean-going ships, while China operates a fleet of 5,500 vessels. Senator Mark Kelly, one of the bill's authors, emphasizes that the goal is not to surpass China, but to reduce the gap and strengthen national security.
Problems in the American shipbuilding sector
The United States faces serious challenges in rebuilding its maritime fleet. Shipbuilding in the USA is significantly more expensive, costing four times more than in China. Philly Shipyard produces container ships that are five times more costly than their Chinese counterparts.
Additionally, the cost of maintaining U.S.-flagged ships is twice as much as those from China or South Korea. Despite these difficulties, the U.S. Congress is planning actions to restore the competitiveness of the American shipbuilding industry and reduce dependency on China.
