President Donald Trump's plan to revitalise the US shipbuilding industry is likely to backfire because it relies on proposed fees on China-linked vessels that will hurt domestic ship operators, seaports, exporters and jobs, industry executives said at US Trade Representative (USTR) hearings on Monday.
At issue are proposed stacking fees on China-built vessels that could top US$3 million per US port call.
The Trump administration says the fees would curb China's growing commercial and military dominance on the high seas and promote domestically built vessels.
US steelworker unions, US steel producers and Democratic lawmakers support the effort, saying it will boost domestic industry.
But the idea has sent a shockwave through the domestic maritime industry because it threatens the survival of the same shipping companies and customers that would drive demand for orders from the US shipyards Trump wants to rebuild.
"National interest will not be served if the effort to boost American shipbuilding unintentionally destroys American-owned carriers," Edward Gonzalez, CEO of Florida-based Seaboard Marine, the largest US-owned international ocean cargo carrier, testified on Monday.
Like many US operators, Seaboard relies on vessels made in China. It has 16 China-built ships in its fleet of 24 vessels, according to maritime data provider Alphaliner.
US vessel operators said the fees on Chinese-linked vessels also would push more US cargo to foreign-owned ocean shipping companies that have resources to better weather the change.
According to the USTR, China's share of the shipbuilding market grew from less than five percent in 1999 to more than 50 percent in 2023.
US shipyards turn out fewer than 10 ships annually while China's produce 1,000, speakers said.
Meanwhile, industry executives said shipbuilders in Japan and South Korea would struggle to meet demand in the years it would take US shipyards to build up capacity.
Replacing existing China-built vessels is not like flipping a light switch, said Kathy Metcalf, CEO of the Chamber of Shipping of America. "Penalising China and the US marine transportation system is not an acceptable result." (Reuters)
'Trump's fees on Chinese ships will backfire'
2025-03-25 HKT 09:08
