China uses unfair policies to dominate global shipbuilding and maritime logistics, according to sources familiar with the outcome of a months-long U.S. investigation into the industries.
U.S. Trade Representative Katherine Tai Investigation launched in April 2024 Under the 1974 Trade Act at the request of U.S. unions such as the United Steelworkers. Section 301 of the Act allows the United States to punish foreign countries for conduct deemed “unreasonable” or burdensome to U.S. commerce.
One of the sources said investigators concluded that China targeted the shipbuilding and shipping industries using financial support, barriers to foreign companies, forced technology transfers, intellectual property theft and procurement policies to disincentivize it. Industry gain advantage.
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Beijing has also “severely artificially depressed China's labor costs in the maritime, shipbuilding and logistics sectors,” the person said, citing excerpts from the report.
There was no immediate comment from the U.S. Trade Office, the White House or President-elect Trump's transition team. Chinese officials could not immediately be reached for comment.
“Subsidies help China dominate the market”
The survey cited data showing China's share of the $150 billion global shipbuilding industry has expanded from about 5% in 2000 to more than 50% in 2023, helped by government subsidies, where it once dominated of U.S. shipbuilders has fallen below 1%. South Korea and Japan are the second largest shipbuilding countries.
The report gives the incoming administration new tools to crack down on China and could pave the way for union-proposed tariffs or port fees on Chinese-made ships. They said such a measure would likely come after a public comment period.
Trump used the same Section 301 to impose tariffs on hundreds of billions of dollars worth of Chinese imports during his first term after an investigation by the Office of the U.S. Trade Representative found that China had misappropriated U.S. intellectual property and forced the transfer of U.S. technology to Chinese companies.
The U.S. Trade Representative's Office will release the findings later this week, days before Democrat Joe Biden leaves office on January 20, sources said.
The report comes amid sharp criticism from the United States and other Western powers of China's aggressive industrial policies and aggressive policies. Overproduction of commodities such as steeland reflects a rare bipartisan consensus on the need to repair U.S. shipbuilding. China denies any wrongdoing.
The report follows four years of efforts by the Biden administration to reduce China's dominance by continuing Trump-era tariffs, adding new tariffs, including on electric vehicles, and imposing a series of export controls.
Tai's office announced the last-minute deal last month An investigation into older Chinese-made “legacy” semiconductors That could lead to more U.S. tariffs on chips from China that power everyday items like cars, washing machines and telecommunications equipment.
Experts agree that rebuilding the once-vibrant U.S. shipbuilding and shipping industry will take decades and tens of billions of dollars. They say tariffs alone are not enough.
According to excerpts shared with Reuters, the report concluded: “China's targeting of the maritime, logistics and shipbuilding industries to achieve dominance represents the biggest obstacle to U.S. revitalization in these industries.”
Scott Paul, Chairman American Manufacturing AllianceThe nonprofit Labor-Management Partnership said it understood the findings were compelling.
“My understanding is … that there will be a process in place to try to stop the erosion of our shipbuilding industry base and allow it to grow again,” he said.
Trump: U.S. may need help building naval ships
Trump has said he would raise tariffs on Chinese goods to 60%, and last week he slammed China's move to dominate the commercial and military shipbuilding industries. told radio host Hugh Hewitt The United States has “suffered tremendously” and needs to change course.
He also suggested that the United States may have to turn to its allies to build the naval ships needed for the US military.
Trump's incoming national security adviser Mike Waltz is also deeply involved in the issue, drafting a bipartisan bill with Democratic Senator Mark Kelly before he resigned from Congress. to revitalize the U.S. shipbuilding industry.
“We are overly reliant on China in particular. We don't have surge capacity. Our shipbuilding capacity is very limited, which is completely unacceptable for a superpower,” Paul said.
There are now only 20 public and private shipyards in the United States, compared with more than 300 shipyards in the early 1980s. Experts say demand for civilian and military ships is strong and growing.
- Reuters Additional editing by Jim Pollard
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