U.S. Finds China Uses ‘Unfair’ Means To Dominate Global Shipbuilding Sector

A recent investigation by the United States has found that China unfairly controls the global shipbuilding, maritime, and logistics industries. The investigation was conducted by the Biden administration, following a request from U.S. unions. The probe began in April 2024.

The U.S. Trade Representative (USTR), Katherine Tai, started the investigation under the Trade Act of 1974.

This law allows the U.S. to impose penalties on other countries that engage in unfair trade practices. The unions that asked for the probe believe China’s policies are harming U.S. industries.

The investigation revealed that China is using unfair practices to dominate the shipbuilding sector.

These include giving financial support to its shipbuilders, blocking foreign transfers, stealing intellectual property, and using policies that give China’s industry an unfair advantage.

One source said that China also keeps labour costs low in these industries, making it even harder for other countries to compete.

The report also showed that China’s share of the global shipbuilding market has grown rapidly. In 2023, China made up more than 50% of the $150 billion shipbuilding industry, up from just 5% in 2000.

Meanwhile, U.S. shipbuilders now control less than 1% of the market. South Korea and Japan remain the other top shipbuilders.

This investigation gives the Biden administration new grounds to take action against China. U.S. unions have suggested penalties like tariffs (taxes on imports) or fees on ships built in China.

The findings are similar to actions taken during the Trump administration, which also used the Trade Act to impose tariffs on Chinese goods, claiming China was stealing U.S. technology and misusing intellectual property.

The USTR is expected to release the official report soon, just before President Biden leaves office on January 20, 2025.

The U.S. and other Western countries have criticised China’s industrial policies, especially its overproduction of products like steel. Both parties in the U.S. agree that something needs to be done to protect U.S. shipbuilding.

Experts say that rebuilding the U.S. shipbuilding industry will take many years and cost billions of dollars. While tariffs could help, experts say they won’t be enough to bring the U.S. shipbuilding industry back to life on their own.

Scott Paul, president of the American Alliance for Manufacturing, said that the findings show how China’s actions are harming U.S. shipbuilding. He added that the U.S. needs to act now to stop the decline of its shipbuilding industry and start rebuilding.

Former President Donald Trump has also spoken out against China’s dominance in shipbuilding. He said that the U.S. may need to rely on its allies to build the ships needed for the U.S. military.

Today, the U.S. has only 20 public and private shipyards, compared to more than 300 in the early 1980s.

Experts say there is a growing demand for both commercial and military ships, which could provide an opportunity for the U.S to rebuild its shipbuilding industry.

Reference: Reuters

Source: Maritime Shipping News