Chinese dragon – the new ruler of the seas 4. The American eagle returns to protectionism: different measures

Expansion of cargo preference laws

In addition to the SHIPS Act, cargo preference rules play a separate and complementary role in supporting U.S. shipbuilding. Cargo preference laws require that a portion of government cargoes (for example, military cargoes, food aid, and strategic goods) be transported on U.S.-flag vessels. Proponents of reviving the American merchant marine recommend considering an expansion of these requirements, for example by mandating that a share of U.S. exports also be carried on U.S.-flag ships. Recently, the Office of the United States Trade Representative (USTR)* proposed a phased introduction of a requirement for exporters to use U.S.-flag (and, ultimately, U.S.-built) vessels for up to 15% of shipments by 2032. These measures would ensure an expansion of the customer base for American shipyards and maritime labor while strengthening the economic and national security interests of the United States. Such an expansion would guarantee steady demand for new ships, create thousands of jobs in the maritime industry, and provide shipyards with the volume they need to modernize and remain competitive on the global market. Incentives such as preferential tariffs or priority access to ports for U.S.-flag vessels could further reinforce this protection. Combined with construction subsidies and operational support under programs such as the Maritime Security Program, these steps would not only protect America’s maritime sovereignty, but also ensure long-term investment in U.S. shipbuilding capacity.

* — The Office of the United States Trade Representative (USTR) is responsible for developing and coordinating U.S. policy on international trade, commodities, and direct investment, as well as overseeing negotiations with other countries. The U.S. Trade Representative, a Cabinet member, serves as the President’s chief trade advisor, negotiator, and spokesperson on trade issues.

Introduction of strategic fees and restrictions on imports of Chinese maritime goods

To counter what Americans see as China’s “predatory” practices, U.S. trade authorities are taking overtly protectionist and discriminatory steps by imposing sanctions for dependence on Chinese ships and equipment. USTR measures in response to China’s dominance in shipbuilding include high port-entry fees for vessels owned by China or built in China, designed to discourage shippers from using such vessels for cargo bound for the United States. For example, any vessel operated by a company linked to the PRC, or even a foreign ship built in China, would have to pay additional fees upon arrival at U.S. ports, with these fees increasing annually.

In parallel, USTR has proposed tariffs of up to 100% on key Chinese-made port equipment such as gantry cranes, intermodal chassis, and shipping containers, to encourage sourcing from other countries.

Another innovative rule would require that an ever larger share of U.S. liquefied natural gas (LNG) exports be carried on U.S.-built LNG tankers rather than foreign-built ones. Taken together, these trade measures “level the playing field” by raising the cost of China-subsidized shipping and reducing U.S. dependence on Chinese maritime freight. They also send a signal to industry that investment in American shipbuilding (and that of allied countries) will be rewarded, whereas reliance on Chinese supply chains will be associated with financial risks.

Strengthening allied cooperation and expanding their capabilities in the Arctic

Since the challenge posed by China is global in nature, the United States is being urged to strengthen joint work with allies, focusing on strategic niches such as Arctic shipping. On the international front, the U.S. should lead efforts to revive a “rules-based” system of shipbuilding and trade subsidies, as opposed to China’s “predatory” subsidy regime, by bringing in such major shipbuilding nations as South Korea, Japan, and European countries to collectively counter China’s unfair practices.

This could mean a new agreement setting limits on subsidies or a coordinated refusal to use Chinese-built ships for government charters, and so on. In addition, technology sharing and joint development of new ship or icebreaker designs could help all participants achieve better economies of scale outside China’s orbit.

There are already promising examples of how such cooperation can work. South Korean company Hanwha Ocean has allocated 5 billion dollars to expand the Hanwha Philly Shipyard repair yard, increasing output from fewer than two ships a year to 20. Alongside infrastructure upgrades and automation, Hanwha has placed an order for 10 tankers at the yard, and the workforce is expected to grow to around 5,000 people. Such joint investments not only bring in capital and technical expertise, but also provide a guaranteed order book that stabilizes U.S. production lines—a partnership model that America should replicate with other allies.

Thus, having grasped the full extent of the degradation of yet another key industrial sector, American industrialists are seeking to mobilize not only financial and technological, but also political resources to devise a strategy to rescue shipbuilding. This sector of strategic importance, which ensures control over global maritime trade flows and the development of the wealth of the world’s oceans and coastal territories, was carelessly destroyed in the course of liberal–globalist policies, lulled by the false melodies of post‑industrialism. Yet another “mistake” of liberal globalism that is indeed worse than “betrayal”. One can only hope that this American lesson has been well learned by the leaders of Russian shipbuilding, which in recent years has indeed begun to acquire strategic contours of development.