Reports say the Trump administration is preparing an executive order designed to reinvigorate US shipbuilding and reduce China's foothold for the global maritime industry.
Draft Order Reviewed by the Wall Street Journal We provide an overview of 18 measures aimed at strengthening the domestic sector. This involves charging fees for Chinese-made ships and cranes entering US ports and establishing a new office within the National Security Council to oversee maritime policy.
In a speech to Congress on Tuesday night, President Trump expressed his administration's commitment to regaining the country's shipbuilding capabilities and announced plans to set up a new shipyard in the White House.
“We're going to make them very fast soon,” Trump declared, acknowledging the US's behind-the-scenes shipbuilding division.
The executive order may change while still in draft format, and incorporates several long-standing bipartisan proposals aimed at strengthening the maritime industry.
These include pending Congressional Acts seeking to restructure the domestic shipbuilding sector and policies proposed by the office of US trade representatives, which can charge fees on Chinese-language vessels docked at American ports or built in China.
Although similar proposals have faced political obstacles in the past, Trump's enforcement actions could bypass the lengthy legislative process.
“He could quickly track them down with his pen strokes if implemented as an executive order,” a shipping industry official familiar with the discussion told the Journal.
One of the key drivers behind the executive order is Trump's national security adviser, Mike Waltz.
Before joining the administration, Waltz co-hosted bipartisan laws in Congress, expanding the flagged US fleet and providing financial support and tax incentives to domestic shipbuilders.
National security concerns have raised bipartisan interest in strengthening the US maritime capacity, particularly as fears that the US shipbuilding sector and commercial fleet are at risk to China.
The draft order includes provisions for establishing a Maritime Opportunity Zone and a Maritime Security Trust Fund.
Proceeds generated from fees charged on ships and cranes built in China will be allocated to fund domestic maritime initiatives.
The proposal raises opposition from international shipping companies, particularly those based in the Asian parts of Europe, claiming that such charges could disrupt global trade. When similar tariffs were raised by the office of US trade representatives last month, the marine shipping company expressed concern about the impact on supply chains and port accessibility.
According to Linerlytica data, China is the dominant force in shipbuilding around the world, generating almost 29% of the world's active containerships by container capacity.
Chinese shipyards also account for around 70% of Order's new containership capacity, strengthening their strategic advantage in the maritime sector.
Geneva-based Mediterranean CEO Soren Toft (the world's largest container line), warned that the proposed rate could cause airlines to expand operations at smaller US ports due to higher costs.
“If the Trump administration implements fees, carriers will be forced to pull services from several small US ports because they are not worthy of unloading small containers,” Toft said Monday at S&P Global's annual TPM25 shipping meeting in Long Beach, California.
Toft further warned that shipping costs for certain Asian US routes could increase up to $800 per 40-foot container.
He emphasized that these costs will ultimately be passed on to importers and consumers, raising concerns about the impact of inflation on goods transported via marine cargo.
Once the administration completes its executive order, stakeholders across the maritime and trade industries are closely monitoring the global transport dynamics and potential impact on US economic interests.
“President Trump has long debated about rebuilding America's shipbuilding capabilities, but there is no official announcement at this time in the White House,” said White House spokesman Anna Kelly.
A Chinese government spokesperson told the Post that the US shipbuilding industry “had lost its competitive advantage years ago due to overprotection.”
“The development of related industries in China is a result of technological innovation and active market competition for businesses, benefiting from its complete industrial manufacturing system and huge domestic market,” a Chinese government official said.
A spokesman denounced the US as “blam”[ing] China is China on its own issues that lack de facto basis and are contrary to economic common sense. ”
“If the US insists on charging port rates, it would push up global shipping costs, destroy global production and supply chain stability, increase US inflationary pressures, weaken the global competitiveness of US goods, undermine the profits of US consumers and businesses, and cause multiple “backlashes” in the US economy and employment.
“China is urging the US to respect facts and multilateral rules and not to make the same mistakes over and over.”
