“Today, the U.S. ranks 19th in the world in commercial shipbuilding, and we build less than 5 ships each year, while the PRC is building more than 1,700 ships. In 1975, the United States ranked number one, and we were building more than 70 ships a year.” - Katherine Tai, U.S. Trade Representative (2021-2025)
The current state of U.S. shipbuilding capabilities is dismal. How bad is it? It is so bad that Democrats and Republicans AGREE it is a problem - and they also agree on most of what must be done to change the status quo.
In April, President Trump signed an Executive Order titled “Restoring America's Maritime Dominance.” To quote that EO, “Recent data shows that the United States constructs less than one percent of commercial ships globally, while the People’s Republic of China (PRC) is responsible for producing approximately half.”
The current effort to save U.S. shipbuilding started during the Biden administration. In the spring of 2024, we got the findings of a U.S. Trade Representative Section 301 investigation into whether or not China is engaged in anti-competitive practices. That release led to the “Ships for America Act” introduced by Senator Mark Kelly (D-AZ), Senator Todd Young (R-IN), Rep. John Garamendi (D-CA), and Rep. Trent Kelly (R-MS).
When both sides of the aisle agree, the problem must be huge… and in the case of U.S. shipbuilding capabilities, it is gargantuan.
There are currently about 80 U.S.-flagged ships involved in international commerce compared to over 5,500 China-flagged vessels. And the connection between military shipbuilding and commercial shipbuilding is too strong to ignore.
The Numbers Tell the Story
According to the international law firm Troutman Pepper Locke, in 1951, the United States had more than 1,200 large, privately owned merchant vessels. Today, there are fewer than 180, a drop of over 85 percent in 75 years. American shipyards are currently building between 5 and 8 large commercial ships each year.
Now let’s compare that to China.
Chinese shipbuilders are responsible for more than half of global market share, and according to the US Navy’s own data, China has 232 times the shipbuilding capacity of the United States. So while the U.S. produced eight vessels in 2023, China produced more than 1,000 - and they did it at a fraction of the cost we see domestically.
According to James Holmes (writing for The National Interest), one of the key challenges we face is that America has no meaningful maritime strategy. Holmes is the J. C. Wylie Chair of Maritime Strategy at the Naval War College and a Faculty Fellow at the University of Georgia School of Public and International Affairs.
He wrote that, “The Departments of State, Defense, Commerce, Labor, Transportation, Homeland Security, and even Education are part of efforts at sea, as are the U.S. Trade Representative and the Office of Management and Budget. None of these agencies or cabinet departments stands above the others, holding the power to coordinate actions relating to the sea. The secretary of the navy is not in charge of maritime strategy. Nor is the secretary of defense. Or anyone else.”
So no one is really in charge of this. That’s never a good way to get things done - in the government or elsewhere.
Let’s Get a Move on People!
According to Reuters, the U.S. has lost global market share over the last 50 years because of high costs, but also thanks to complex regulations. It is just too hard to build ships here.
To that point, there is a whole section of the April Executive Order dedicated to procurement efficiency. It calls for:
Improved forecasting of demand infrastructure, materials, and workforce
Reforms that would change staff structure and introduce innovative new acquisition strategies
Reduced layers of approval to move the acquisition process along
And a call for specification rationalization, eliminating what are characterized as “excessive requirements”
If the U.S. shipbuilding approval process is somewhere between slow and slower, China’s has been speeding up. They have strategically designed and built up their capabilities since the 1990s.
In August, the two largest Chinese shipbuilders announced that they are merging into one company. The resulting entity, China State Shipbuilding (CSSC), will be the world’s largest shipbuilder and will start out with 17 percent of global market share in its pocket.
Ironically, the companies were originally part of the same organization, but they were split up in 1999 to increase competition. Now the trend is towards consolidation. Rather than trying to spur competition within China, apparently the plan is to continue dominating global markets, competing on the world stage instead - and it is working.
According to the Center for Strategic & International Studies, China’s largest state-owned shipbuilder built more commercial vessels by tonnage in 2024 than the entire U.S. shipbuilding industry has built since the end of World War II. That’s 80 years of tonnage in one.
We have a long way to go and a short time to get there. Unfortunately, the United States doesn’t have the workforce required to build the ships we need. The procurement efficiency section of the April Executive Order addresses the overall acquisition process, but maybe the real question is build v. buy.
If the goal is really to build back efficiently and with minimal red tape and delays… then maybe buying from the right trading partners in addition to restoring domestic capabilities is a better way to achieve the short-term objective of being less dependent on China for seagoing capacity, making a restoration of our “Dominance” a longer-term goal.
