BY LISA BAERTLEIN AND DAVID LAWDER
LOS ANGELES/WASHINGTON- President Donald Trump’s plan to revitalize 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 hearings on Monday.
At issue are proposed, stacking fees on China-built vessels that could top $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 5 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 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. “Penalizing China and the US marine transportation system is not an acceptable result.”
US vessel operators underpin key American industries like manufacturing, mining, and agriculture by transporting goods to and from inland waterways, across the Great Lakes and up and down the country’s coasts.
Agriculture exporters already are having trouble booking ships beyond May due to uncertainty around the USTR plan, and coal industry representatives have said the fees are making it harder to get their supplies onto the global market.
“I do ask that any efforts that you seek to increase domestic shipbuilding do not come at the expense of market access to farmers,” said Mike Koehne, an American Soybean Association board member who grows soybeans and corn in Indiana.
Nate Herman, senior vice president of policy for the import-dependent American Footwear and Apparel Association, said the port fees would result in a loss of jobs for American workers, higher costs for American exports and imports as well as shortages and rising prices for American consumers.
