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US to Accuse China of Unfair Shipbuilding Practices
The U.S. Trade Representative’s office has concluded that China uses unfair practices to dominate the shipbuilding, maritime, and logistics industries. This finding comes as China secured 70% of newbuilding orders in 2024, widening its lead over South Korea.
Katherine Tai, the U.S. Trade Representative, will release a final report this week after a 10-month investigation launched in response to a complaint from U.S. unions. The report will conclude that China engages in “unjustifiable” or “unreasonable” business practices. The U.S. Trade Representative can investigate and penalize countries involved in unfair trade that harms U.S. commerce under the Trade Act of 1974.
The unions alleged that China’s central government has spent the last 20 years building up its shipbuilding industry. They accused China of manipulating the market to suppress prices and create a global network of ports and logistics infrastructure.
The report will cite government financial support for the Chinese shipbuilding industry and efforts to “artificially suppress China’s labor costs.” It will also accuse China of forced technology transfers, intellectual property theft, and unfair procurement policies.
China previously dismissed the investigation as lacking factual basis.
The U.S. has not specified potential penalties against the Chinese shipbuilding industry. U.S.-flagged ships are not built in China, and U.S. use of Chinese yards is limited. However, a source suggests the U.S. intends to revive its shipbuilding industry. Currently, just 20 public and private shipyards operate in the U.S., compared to over 300 in the early 1980s.
The unions have proposed a port fee on Chinese-built ships docking in the U.S. and a fund to support the U.S. shipbuilding industry.
The enforcement of any actions resulting from the report will fall to the next administration. Legislation is pending in Congress that could impact the situation. This legislation aims to rebuild the U.S. maritime sector, with proposals requiring a portion of U.S. imports from China to be carried on U.S.-flagged ships.